GOVERNMENT ORDERS

THE BUDGET

FINANCIAL STATEMENT OF MINISTER OF FINANCE

Mr. Ted White (North Vancouver, Ref.): Mr. Speaker, before question period a member asked that if we had implemented the Reform's zero in three program, whether would we have zero today.

As I said in my speech, example in countries like New Zealand, provinces like Alberta and states like Massachusetts, Michigan and New Jersey show that exactly the opposite would have happened. We would be talking today about how to spend the surpluses today instead of witnessing the Liberals trying to introduce their new LST, the Liberal super tax.

As I explained in my speech, business has explained how to create jobs. We have to cut the spending, run surpluses and get taxes down so that there is more money in the pockets of consumers so that demand can be increased, which creates new jobs and investment. It has been proven to work all around the world. Cut spending, start running surpluses and the money will flow in through that method.

Surely the member can see that his way simply does not work. Two decades of deficit spending; if it worked we would all have three jobs each by now. Instead we have continuing 10 per cent unemployment.

The Speaker: Ordinarily it would be the Liberals' turn to have a speaker but I understand there has been agreement among the four speakers who have agreed to switch places. The members for St. John's West and York North who will share time will drop down one slot. It is my understanding that the members for Fraser Valley East and Delta will now be given the floor.

Is that agreeable to the two members?

Some hon. members: Agreed.

Mr. Chuck Strahl (Fraser Valley East, Ref.): Mr. Speaker, I am pleased to make a few comments on the budget today. I begin by quoting the famous Yogi Berra, who summed it all up when he said: ``It is déja vu all over again''.

I feel like I am having a déja vu experience here today talking about this budget. This is a budget that Canadians have already seen not once but many times before; the predictions of great things to come some distant time down the road. I remind the House that has been promised before and it does not give a lot of hope to Canadians who are looking for some kind of solution to our fiscal mess today.

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Let me remind the House of a few things that went on before. When Mr. Trudeau took office in 1968 the total national debt was $17 billion. When he left it was $200 billion. Then Mr. Mulroney took the driver's seat and when he was finished with us the debt was $508 billion. Now the Liberals are at the wheel again and this year the debt is predicted to go to over $600 billion. Sometime in the next millennium we hope for a balanced budget, so say the Liberals, but then the debt will be possibly $650 billion.

It is all talk and we have heard that kind of talk before. As it happened before, a balanced budget may be a dream despite the good wishes or the good hopes and dreams the finance minister puts into his predictions. The deficit this year will be almost $33 billion. The Liberals hope to reduce it by $9 billion, half of which will be obtained through increased revenues from Canadian taxpayers.

A rise of just one percentage point in the interest rates adds $1.3 billion to the deficit. This year, who knows what will happen to the interest rates? Will they go up or down? Who would have

predicted a year ago that they would drop three points and save the bacon of the predictions of the minister in the last budget?

If there is the slightest hiccup in the U.S. economy, if there is a slight problem in the elections coming up in Russia, if there is a problem of world turmoil in Taiwan as was mentioned in question period, or in Israel, who knows? Interest rates could jump. If they jump by only a couple of percentage points, the predictions of this minister will go down the drain.

There has been just a small three point rise. If we go back to where we were a year ago, it would leave us once again with a $30 billion deficit. There would be panic among investors, among small business people and among people who are trying to plan for their future. It would cause drastic cuts in health care, in welfare, in pension plans, plans that all Canadians have a right to expect from the Canadian government. That is how dicey the situation is.

I want to talk for a moment about these interest payments on our national debt. The debt is the problem and the debt has not been addressed in this budget. Not only have the Liberals kept the deficit very much alive, they seem somehow to be proud of a deficit of $25 billion. We have added $100 billion to the national debt since this government took office.

The budget states that this year interest payments will be $48 billion. These payments have risen even faster than the debt. They have jumped by 30 per cent since the government took office. To put this into perspective, what could we do with the $48 billion this government seems thrilled to be able to spend on the interest on the debt?

We could build 25 high speed rail links every year in Canada for that much money. We could pay the entire budgets of B.C., Alberta, Saskatchewan, Manitoba, the Yukon and the Northwest Territories combined. We could give them a complete tax holiday, tell them all to take a vacation, that all of the expenses would be looked after just on the interest on the national debt. We could give a cash present every single year of $1,250 to every man, woman and child in Canada with that much money.

Imagine, a person with three or four children could go home and say: ``It is tax time. The government gave me $8,000. Thank you''. But it will not happen. That dream will not happen because this government seems to be satisfied to run deficits, to build the national debt and to pay 35 cents out of every dollar collected in servicing that national debt.

The Canadian Chamber of Commerce made a prebudget presentation to the finance committee and said: ``The massive debt is choking our economy and hampering our international competitiveness''. It is not talking about long term projections. It is not talking about what may or may not happen to the interest rates. It is not talking about the wish list of this Liberal finance minister and the people who put out the budget. It is talking about the debt.

This is not pie in the sky stuff for fabrication. It is the debt. While the finance minister seems thrilled that we will only have a $25 billion or $30 billion deficit next year, the debt has climbed by $110 billion under his management. He seems to be thrilled with this.

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As the Chamber of Commerce says, the debt is choking our economy, it is hampering our international competitiveness and it is costing us jobs, jobs, jobs. Until the government side of the House understands that concept, we are in a long tunnel with very few dim lights spaced out along the way. The light we will see at the far end will be an incoming train, which will be a fiscal disaster if this kind of policy continues.

In the plan Reform has offered this would have been the last year with a deficit. Imagine. All of the pain would have been over. All of the cuts would have been over. All of the health care funding would have been restored and firm because there would have been no more deficit if the government would have followed our advice. Next year we would have started to pay down our debt. Next year we would have been able to look forward to tax relief. We would have wondered what to do with the extra money. However, that will not happen. We are looking at continuing cuts and increased tax burdens far into the future.

The few good ideas that are in the budget-and I am happy to give the government credit for them-were stolen completely from the Reform Party's zero in three plan. There are no new major tax increases, which is good. We applaud the government for that, although tax cuts would have been better. The Liberals have raised taxes 22 times since they have taken office. Thankfully there are no new tax increases in this budget, but there were certainly plenty in the past.

I will give the government credit that it has continued to hold the line on taxing the resource allowance, which is an area of my critic portfolio. I badgered the government in question period about it. I have tried to get confirmation on it and I am pleased to see that at least the taxes have not gone up on the resource allowance.

However, it continues to fund government babies such as AECL, the Canada Mortgage and Housing Corporation, the CBC, subsidies to business and of course the MP pension plan, among other things.

The rise in tax deductibility for charitable donations is something with which I agree. It is a good move. Again, if we look at the taxpayers' budget, which is the budget we tabled a year ago, we will see that we said at that time: Give a break to charitable organizations. Allow them to come in and fill some of the void that will be there when some of the cutbacks happen in government. Allow the charitable organizations to look after that. They will do that if they are given a chance. I am pleased to see the charitable

donation idea. It was stolen from our budget but I am happy about it. If the government wants to steal more, I encourage it to do that.

When can Canadians hope for a rise in their standard of living, lower taxes and more job creation with this budget? Certainly not in this century. Since January of this year 200,000 full time jobs have been lost. We heard about that in question period today. Only tax relief, lower payroll deductions and a light at the end of the tax tunnel will bring those jobs back. The finance minister has put off his political pain and in the meantime he has sacrificed jobs for Canadians.

This budget is like an anaesthetic without an operation. It is like going to the dentist, getting ready, going through the fear, getting the needles and then the dentist saying: ``We have done all of that, but I am sorry, we are not going to drill today. It would be too unpleasant. I would like you to come back next year and I will continue to freeze your mouth. I will keep drilling your teeth, causing you pain and at some point I will fix the problem, but not today. I will just keep on giving you the pain''.

The finance minister could be called Doctor Doolittle. I would say that Canada does have a major toothache. It is called the Liberal Party of Canada. It will not get to the root of the problem and that is something which will cause pain to Canadians for years to come.

Mr. John Bryden (Hamilton-Wentworth, Lib.): Mr. Speaker, I appreciated my colleague's remarks. However, I was surprised that in congratulating the Minister of Finance for improving the opportunities for charitable donations, given the interests of his party, he did not make some remark with respect to the fact that charitable organizations need to be brought to a level of accountability and a level of competent management and openness which would justify the type of hand that the Minister of Finance is extending to them. As a Liberal member, bringing this level of accountability to the charitable sector is very near and dear to my heart.

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I would ask the member if he would support me in that type of effort. This is the kind of suggestion that was made by the Minister of Finance and something we hope to see in the future.

Mr. Strahl: Mr. Speaker, I thank the hon. member for his comments on the question of charitable organizations. I have heard the member make presentations in committee and elsewhere about his desire for accountability in charitable organizations. I know he would agree with me that the huge majority of charitable organizations run a clean ship with good operations, that they keep the books well and are accountable, sometimes within their own organizations, for the money they raise and how they spend it.

I agree with the member. He has brought forward a bill on charitable organizations that specifically asks for the salaries and benefits paid to the public officers of those companies to be made public and to be available to people who are perusing charitable organizations in order to ensure they are accountable. I support him in that and other measures that will allow charitable organizations to prove their worth.

If we are going to expect more from charitable organizations as far as filling the gap left by government services, then I think it only right that we expect accountability. In essence these are our tax dollars, deferred dollars that are given out in that manner. I do not think most charitable organizations are going to be too nervous. It is the ones that are sweating too heavily about not wanting to share what they get paid that need to be careful not to destroy the goodwill they are trying to build.

I would urge him to continue that fight. I hope we can find a way to make charitable organizations accountable while maintaining the privacy they deserve, making sure they will not be targeted in some way.

He has some good ideas and I support him in his efforts.

Mr. John Cannis (Scarborough Centre, Lib.): Mr. Speaker, I want to start by thanking the member. He complimented our budget more than he criticized it.

In his criticism he said that we must address the debt problem and I agree. His party continues to refer to Alberta and Mr. Klein. I am very happy they have their finances in order. Mr. Klein has indicated that he has taken care of the deficit and will now take care of the debt. That is the direction we are headed in. As our borrowing needs decline steeply we will be in a position to attack the debt as well. Unless he has another alternative, at least this Doctor Doolittle is doing something. Maybe Doctor Do Nothing could improve on it.

Mr. Strahl: Mr. Speaker, I do not know what my nickname might be if I were finance minister. I could probably think of some choice ones.

Everyone knows we cannot reduce the debt until we balance the budget. That is why we have been begging the finance minister to show us a balanced budget. If we could have a balanced budget sometime in this millennium, we could assure investors, taxpayers, people on fixed incomes, people in the health care system and elsewhere that we will be able to sustain social programs, offer tax relief, that we will be able to offer some light at the end of the tunnel. Until we balance the books none of it is possible.

Alberta has a wonderful problem. Does it spend more money on the social welfare program? Does it retire some more debt? Does it lower taxes? None of this is going to be in the cards ever in the life of this Parliament until we balance the yearly deficit. That is why there is such emphasis on it from this party. We want to preserve the things that Canadians are demanding and offer them some hope for the future.

Mr. John Cummins (Delta, Ref.): Mr. Speaker, I will start by acknowledging that the government appears on target with its deficit reduction program, which simply goes to show that if we set the bar low enough we should at least be able to crawl over it.

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The low targets set by the finance minister mean that our debt load is still increasing at a troubling rate. It will hit $602.7 billion or 74.8 per cent of gross domestic product in 1996-97. This federal debt is one of the main culprits responsible for our ever increasing tax bill.

To put it another way, the total tax bite has grown from 29.5 per cent of the gross domestic product in 1980 to 35.8 per cent of gross domestic product in 1994, a full 21.5 per cent increase. This growing tax bill directly impacts on our ability to maintain our commitments to Canadians.

In the last election Reform's zero in three budget proposal called for the tax back of pension benefits to seniors to kick in if total family income exceeded $54,000. For this we were accused of attacking the poor. In this budget some single seniors and couples with total incomes between $40,000 and $45,000 will receive lower benefits and all seniors with incomes above $45,000 will receive lower benefits. In my part of the world with its high cost of living, $45,000 is not a high family income.

The finance minister talked with some pride about cuts to department spending. Budget documents tell me that the Department of Fisheries and Oceans budget has been cut by about 20 per cent. A cut of 20 per cent may be reasonable. It may be the monetary target the minister is hoping to achieve, but is it allowing for the protection of the resource?

DFO bureaucrats, like all bureaucrats, will maintain the bureaucracy at all costs. All the fish can be gone, but the bureaucracy will remain to prepare for the fishery of the future, I suppose, or at least that seems to be the drill on the east coast.

Over the past 20 years we have witnessed a tremendous growth in the DFO bureaucracy on the west coast, while the number of staff who deal directly with fish and people have declined. Programs which impact fish have been cancelled.

In the estimates which were delivered today it shows fisheries operations 1995-96 to decreased from $422 million to $295 million. That is in large part where services are delivered, the account from which services are paid. At the same time corporate policy and program support, largely bureaucratic in nature, increases from $247 million to $273 million.

I have a letter from Don Roberts, chairman of the Nanaimo branch of the Pacific Trollers Association. Trollers are hook and line fishermen. They bring in a premium product from the high seas for which they can receive $4 and $5 a pound. The government has seen fit to take fish normally caught by trollers and give it to others who catch these fish in river fisheries and are lucky to get $1 a pound. But that is a story for another day.

Today Don's letter deals with the potential closure of the Nanaimo River salmon hatchery. I will read part of his letter. It states:

Today this hatchery produces 700,000 chinook fry, 450,000 coho fry and up to 1,000,000 chum fry annually. This is a far cry from the less than 100,000 chinook and coho produced when the hatchery opened its doors in 1979. The adult salmon from these releases form an important part of our local fisheries, as well as playing a major role in the rebuilding of seriously depleted lower Georgia Strait chinook stocks.

Several years ago the Pacific Salmon Commission identified lower Georgia Strait chinook as being a stock of extreme concern and made them a priority of the chinook rebuilding program embodied in the Pacific Salmon Treaty. The Nanaimo River, along with a few other systems, were recognized as major contributors to this stock and essential to the rebuilding program. As a result, the Nanaimo River hatchery received additional funding for hatchery expansion to accommodate a substantial increase in chinook production. Now that this capacity has been realized, it is shocking to discover that Nanaimo is one of the hatcheries being considered for closure to meet arbitrary budget cuts.

Over the years DFO funding has been complemented by financial, material and sweat contributions from numerous sources. The hatchery has earned the respect and support of the central island area. Some of the hatchery supporters are the: Community Futures Development Corporation of Central Island, city of Nanaimo, Nanaimo Fish and Game Club, Pacific Salmon Foundation, Pacific Trollers Association, School District No. 68, United Fishermen and Allied Workers, Nanaimo Harbour Commission, Harmac Pacific, B.C. Federation of Wildlife, MacMillan Bloedel, Nanaimo First Nations, Nanaimo Kiwanis Club and Gulf Trollers Association.

These groups represent thousands of hours of volunteer labour. In reality, DFO merely provides the seed money which provides a focus for these community groups that have a keen interest in preserving B.C.'s fishery resource. The Nanaimo hatchery is not alone when it comes to attracting volunteers. This community's spirit is evident at most, if not all, hatchery sites in B.C.

There are other irresponsible cuts which save bureaucrats' jobs but threaten the fishery resource. The minister claims to have met his target but the result is the real job of the department is not getting done.

I have here enforcement reports from the department received under access to information which support my contention. Enforcement officers in the field want the job done but cannot do it due to the lack of resources and personnel.

Problem dated June 18, 1995 in the north coast division; staffing levels are at a critical level in the conservation and protection sector on the north coast. If we want to address enforcement programs on the north coast we need to address our staffing issues.

Problem dated June 1995 at the Somass River; DFO staff levels are too low to monitor the fishery. The real problem will be the outside catches. It will be totally unmonitored.

Problem dated March 4, 1996, Vancouver Island, a patrol ship's summary. August 26-29, complaints about sportees, staff unavailable. No patrols.

Problem at Terrace, B.C., incident report. A summary for Kitimat area dated December 15, 1995; for this timeframe activities were sporadic due to changing staff and new officers. The full time officer worked alone for the most part until his departure in early August. During this period boat patrols were few and far between, making DFO's presence almost non-existent.

Problem dated July 17, 1995, south coast division; numerous rumours of double limits being taken. Not investigated due to overtime constraints. Major closures throughout the Victoria field district. Cause for concern is lack of available officers and resulted in no shellfish patrols being conducted.

Problem dated August 28, 1995, south coast division; troller fishery largely unmonitored due to staff commitments in Area 20. Poaching on river systems not patrolled due to lack of staff.

Problem, Victoria district update, period ending September 4, 1995. No staff available to patrol Cowichan River, Gold Stream River and Sooke River.

I am all for slim government but I cannot support the mindless trashing of a department with a constitutionally mandated obligation to protect our fisheries resource. I cannot support mindless cuts to health care, education and social programs.

Departmental spending cuts are a necessary objective, but simply meeting the target is not enough. The government must ensure essential departmental objectives are not undermined by wrong headed cuts.

Mr. Gar Knutson (Elgin-Norfolk, Lib.): Mr. Speaker, I would like to address my comments, not so much to the details of my Reform colleague's speech as I thought he put a good argument forward, but more or less to the main message, that we need to cut faster, cut deeper and get to a balanced budget quicker.

Reform Party members do a good job in identifying the costs of carrying a heavy deficit and a heavy debt. Unfortunately I do not think they do a bit in terms of identifying the costs of the cuts themselves.

They use Alberta as an example of a government that has done a good job in getting its finances in order. They have failed to point out that in Alberta, for example, the rise of children coming into care with the Children's Aid Society has risen by 21 per cent since Premier Klein started to cut provincial spending. Why is that? Poor people. Their abuse rates did not go up but people simply could not afford to keep their children. Is that the Canada we want to live in?

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In my province of Ontario, Michael Harris has cut welfare payments on the theory that it would encourage people to find work. When I checked with municipal officials after the welfare cuts, they were telling me that all it has done is force people to choose between feeding their children and paying their rent. Now they are being forced to move and live on the streets.

Mr. Cummins: Mr. Speaker, I thank the hon. member for the statement because it is not much of a question.

The fact is that cuts can be made to bureaucratic overburden but the delivery of services must be preserved. We have maintained all along that we must try to make government lean and mean but efficient. That is the key word. We must continue to provide the services required.

I tried to point out in my speech that while the cuts are being made, they are being made to the delivery of a service and the bureaucratic overburden remains intact. When one does that to a resource like the fisheries resource, which is a constitutionally mandated responsibility of the government, then the fisheries resource will disappear and our ability to continue paying for the kinds of services we want is going to go out the window with the fish. That is the problem.

We must find a way to cut but we must do it wisely and smartly. Let us not just look at the bottom line and say: ``I will cut to the bottom line and if I achieve my bottom line I am fine''. It is not just the bottom line that counts. It is what is done with the money that is left. That is where the government has fallen flat on its face with regard to the fisheries resource. It is not doing its job of managing the money it has.

[Translation]

Hon. Martin Cauchon (Secretary of State (Federal Office of Regional Development-Quebec), Lib.): Mr. Speaker, I am particularly pleased today to rise first as the member for the riding

of Outremont, but also as the secretary of state responsible for the Federal Office of Regional Development in Quebec.

I am proud to speak on the third budget of the Minister of Finance, a budget that now allows Canadians as a whole to have hope for the future and to also understand that, when we act together in partnership, when we work together as Canadians, we can accomplish extraordinary things.

When we took office in 1993, the fiscal situation of the country was disastrous. There was no vision for the machinery of government. Management of social programs also was obsolete. But despite that reality and despite the cries of Canadians for reforms, the government of the time refused to go forward, with the result that we inherited in 1993 a less than enviable situation, as Canadians, but also less than enviable when we looked at the issue of the debt and the deficit in terms of the G-7.

Basically, the three budgets of the Minister of Finance revolved around cornerstones and these cornerstones were major reforms. Once again, the budget that was tabled yesterday is a budget that continues in the same direction, a budget that revolves around four main elements.

First, we talk about the fiscal future, about making sure that we can have a better and prosperous future, that we can have a country that is fiscally healthy and that compares favourably with G-7 countries as a whole.

The second element is the role of the government. Again, the Minister of Finance is continuing the major reform of the machinery of government. The third element is making sure that we, as Canadians, who built this country, who based this country on principles and values, can continue to have social programs that meet our expectations and our needs.

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The last element is investment in the future, the new generation and the leading sectors, an investment that will build on the progress that has been made on the economic front since this responsible government came to power in 1993.

I am happy to address this House because the budget is fair, it shows some vision and proves that the government reached its objectives on all levels.

We have talked and talked about the red book, but today, I think we can come to this House with a remarkable balance sheet showing real achievements, particularly on the fiscal front.

It will be remembered that we had talked about a deficit at 3 per cent of the GDP. It is now a reality because the deficit is roughly $24 billion, and that is 3 per cent of the GDP. Now we are looking forward to a 2 per cent deficit for 1997-98.

Also, there are no tax increases in this budget. As we reach our objectives of deficit reduction, this budget will make all of us Canadians and Quebecers proud, and much less dependent on foreign loans than we were before.

This budget shows that the government did its best to generate economic activity that would lead to job creation. More than half a million jobs have been created since 1993, and I think we must do even better than that. The budget gives every indication that we will be able to create more jobs in partnership with all stakeholders in the communities and the private sector.

The second element is the role of the government. As you know, we have launched a large operation which will make all government actions more equitable in the sense that programs will be better targeted.

The results speak for themselves. Take the Federal Office of Regional Development for example. Before, it administered some forty different programs, but now there is only one single program, developed and refined in co-operation with business people and much more in tune with their needs and expectations.

With this budget, we are showing that we keep on rethinking the role of the state; for instance, in the area of food inspection, we announced that we were going to better coordinate activities within the national context. With regard to the way we offer services to people, we are creating a special agency called the Parks Canada Agency.

All these measures are aimed at ensuring that the government, even though it is more streamlined, and less costly for the people as a whole, is going to keep on offering them top quality services.

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With regard to social programs, the Liberal Party is the political party which provided Canada with a social system, a social safety net which is the envy of the rest of the world. Once again, I am proud to say in this House that the Liberal Party is the one which proved able to meet the true challenges by rethinking the social safety net for the long term, in order to provide security to those who will grow up in this country, to offer people in the 1990s a safety net meeting their expectations, and to ensure that our country is ready for the next century.

We spoke about the famous Canada social transfer. The Minister of Finance announced that, in fact, we now had put in place a five-year plan under which we are stabilizing transfers to the provinces and which makes sure that there is a progression in the transfers to the provinces. It is so true that in its budget forecasts the government of Quebec underestimated these transfers. The transfers that we are going to make are more generous by far than what was expected by the province of Quebec.

There is another issue which, I think, is important because the choices we made in the budget reflect not only the values of Canadian society, but also the principles that we stand for and that we have to defend as Liberals, as militants in a party which has always been generous, has always been able to take up challenges, and I am referring to the equalization question.

You know, many provinces, including Quebec, benefit from equalization payments. The Minister of Finance announced that we are going to continue to pay these sums of money and even increase them. So it is an important element, something like the cornerstone of the values that we share as a society.

Another thing also which shows the vision of the government, which is realistic, which proves that we have a greater vision for the future of our country, is the pension reform. We have announced a reform which will be discussed during the upcoming months and under which 80 per cent of Quebecers will be able to receive the same or greater benefits. The majority of women will benefit from this reform.

Concerning the last item, which is the issue of investing in the future, we, as a government, have made choices that are aimed at creating a prosperous economic net, a viable economic net that will generate jobs, and choices that will ensure our businesses will be able to compete in the era of free trade that we live in and also be able to boldly face, with pride and ability, this era of global markets.

We have centred our action on the economic front on young people, and also on high technology and international trade.

As for young people, we, as the federal government, took action that will show the way. We will double for 1996-97 summer jobs available to students. We also made a considerable financial contribution of $315 million over three years, to ensure that we can take action in a more focussed way to respond to different problems facing young people everywhere in Canada.

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We are all familiar with the famous vicious circle: no experience, no job; no job, no experience. Through partnerships with the private sector and by making certain investments, the government will ensure that the next generations can face the future with confidence because steady jobs with a promising future will be available.

High technology is another aspect, as it is essential to Quebec and also to Montreal. As the minister responsible for the Federal Office of Regional Development, I must say that I am quite pleased with the announcements made by the Minister of Finance, particularly as regards the creation of Technology Partnerships Canada, which should be announced shortly by my hon. colleague from Industry Canada. Under this program, $150 million will be invested in 1996-97, and another $250 million in 1997-98, to support the high technology industry. This is excellent news for greater Montreal, considering how dynamic Montreal's economy is in that area. Just think of aircraft manufacturing, pharmaceuticals and the whole environmental issue, which is so close to the heart of the mayor of Montreal, whom we were fortunate enough to meet recently.

In a sense, this budget is a convenient lifeline for Montreal's economy, whose expectations it meets to a T.

The budget also talks about small business. Because regional development goes hand in hand with assistance to small and medium size businesses. As I mentioned on a number of occasions, and I like repeating from time to time, 85 p. cent of all jobs created in Canada are created by small business. The private sector made it clear that they wanted us to set up partnerships with financial institutions, so that additional sources of financing could be made available to high tech businesses. Well, $50 million will be injected into the Business Development Bank, also providing SMBs easier access to sources of financing.

This it what it means to be able to recognize one's role as government, to take action in an intelligent and enlightened way in the interest of the SMBs that are growing in every region in Canada.

There are also tremendous efforts being made on the information highway. I am referring of course to the famous program to connect numerous schools throughout Canada to the information highway.

There is also the famous program to connect all rural communities to the information highway, and we are also seeking a way to connect Canadian SMBs as a whole to that highway. We all know that we are extremely lucky, in the present situation, to enjoy such access, given that we must now compete not only locally, regionally or nationally, but also internationally.

Being in charge of the Federal Office of Regional Development, I was proud, because nowadays, when one hears about SMBs, when one hears of developing markets for the SMBs, one knows that 80 per cent of all new jobs in SMBs are associated with international markets. So, it is important for our businesses gain international recognition and to be competitive, internationally. In that regard, we must praise the finance minister's decision to provide an extra $50 million to the Export Development Corporation, to enable it to study market development opportunities, as well as opportunities to export and gain access to international markets.

That is quite a number of concrete measures and programs which show that the budget is beneficial to small and medium size businesses, while also maintaining the government's objective of creating a stimulating environment to help our economy thrive.

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Here is another measure which shows that we also do something for our regions. Let us take only one example: the possibility, as regards mining flow-through shares, of spreading exploration activities over time. Again, this shows that the government is very sensitive to the needs of the regions. These needs may, in turn, generate various types of research, the establishment of new businesses and, ultimately, jobs.

In conclusion, I think that we have eloquently shown that our Liberal government can maintain a balance in the fulfilment of its responsibilities. We can really tackle the debt and the deficit, while continuing to fulfil our obligations toward Canadians and new generations, and also promoting economic development. I am proud to say that, with the Minister of Finance's third budget, Quebecers and Canadians can now have great confidence in the future.

Mr. Nic Leblanc (Longueuil, BQ): Mr. Speaker, I have a comment for the hon. member for Outremont and Secretary of State. I heard him congratulate his great party, the Liberal Party, a great party that has existed for a very long time and has done wonders, and an extraordinary party that has set up many social institutions in Canada.

I would like to point out to him that he is partly right, but he neglected to mention one thing. When the Liberal government decided to put in place great social programs in areas such as health care-and it interfered in education and many other areas-it neglected to tell Canadians that all these programs would cost money. If that great party had been honest, it would have told the population at the same time that it would cost $2 billion, $3 billion, $20 billion a year to provide those services. But the Liberal government did not say so.

Between 1970 and 1984, Canada's debt increased by $175 billion. Sure, the Liberals gave all these wonderful services to the population, but the member for Outremont neglected to say how they gave them: by borrowing on the backs of Canadians. The great Liberal Party neglected to tell them that the government was providing those services with borrowed money. This is the source of problems.

I would like to remind him also that, in 1983, the finance minister, Mr. Lalonde, who was then the member for Outremont, his predecessor, ran a $45 billion deficit in his budget with revenues that were, at the time, less than $70 billion. This was unprecedented in the history of the world. No other political party in the world had created such a great disaster. Thus the member should remember that the current debt, a great disaster, was created entirely by his great Liberal Party. I know it, for I have been here for twelve years and I am very aware of what went on. Why are we still adding to that debt now?

(1605)

The hon. member forgot to mention another element in the comparison between Canada and other industrialized countries. I checked the tables in the budget, and I found them misleading. As the hon. member mentioned in his speech, annual deficits are compared as a percentage of the gross domestic product. Our target is 3 per cent.

The hon. member neglected to mention that, in all the G-7 countries, when the debt or the deficit is considered as a percentage of the GDP, the provincial and municipal deficits are taken into account. To be a member of the European Economic Community, a country should not have a debt that represents more than 60 per cent of its GDP. Canada's total debt is 105 per cent of its GDP. This country is bankrupt, nobody is saying it, and we go on spending huge sums of money.

We are talking here about the Canadian debt, the federal debt, but we neglect to mention the accumulated debt of the provinces. In the other countries, the debts of states or provinces are included in the total debt. At this time, our real accumulated debt stands at 105 per cent of the GDP, and the deficit at 5.7 per cent. That is much too high.

If only the federal government decided some day to stop being stubborn and reorganized the way we run this country by decentralizing more powers to the provinces, it could be much more efficient, save billions of dollars and wipe out the deficit. But we are heading for a disaster because of this stubborn Liberal government, which wants to keep controlling everything from Ottawa. The hon. member for Outremont and secretary of state should be aware of that. He should openly tell the whole truth to Canadians, instead of half truths.

Hon. Martin Cauchon (Secretary of State (Federal Office of Regional Development-Quebec)): Mr. Speaker, I listened to the comments made by my hon. colleague. Either the hon. member is not taking a very responsible attitude in this House or he has been out of this great democratic forum, which is the House of Commons, for the last two years.

We talk about making major changes in the best interest of Canada and of the whole population, and that is basically what we have been doing since 1993. About the huge deficits we have, I would like to remind the hon. member that it was under the Conservative government, of which he was a member at the time, that Canada had its most outrageous deficits and went through the worst political situation ever in our country.

When the hon. member talks about how much our social programs are costing the Canadian population, his comments seem anachronistic, to say the least. You know, we are talking about social programs which were implemented decades ago. Today, basically, we are acting as the responsible government that we are. We want to review the social safety net we have developed as a

society, and which we are very proud of, to ensure that it is more responsive to the needs of Canadian society.

That is what we are doing and we are going even further by taking action on the economic front and working with the small businesses. We have to increase the competitiveness of our small businesses and use a modern approach to do so. In saying that, I am reminded of course of the Federal Office of Regional Development, which has created a partnership and is working with all of the communities throughout the province of Quebec and providing what is called the SMB access centre, so that our small businesses can have access to world markets, which they did not have before, and can use the federal government's expertise in international development to gain access to a network open to the whole wide world.

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The Liberal Party has always had the courage to make the appropriate changes, always keeping Canada's best interests in mind. We avoid partisanship, unlike the opposition parties, and we also avoid a doctrinaire approach, unlike the opposition parties. We always act in the best interests of all Canadians.

[English]

Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I listened very carefully to the speech of the hon. member and the answer to the question to which he responded.

I could not help but notice that he, like the Minister of Finance, put a lot of stock in the financial deficit of the country, the plans the government has put in place, the targets and the forecasting it has done with respect to the deficit.

I cannot help thinking the hon. member has forgotten about the second deficit we have, the second problem we have to fight, the human deficit caused by the number of job losses that have occurred in Canada, the number of people unemployed from coast to coast, the number of people willing, ready and able to take up work to support the country, to pay taxes and to help reduce the financial debt of the country. However, those people have been denied jobs by the private sector and by the policies of the government and they will continue to be denied jobs.

There are no plans in the budget to deal with unemployment. There are no targets set to bring down unemployment. There are no forecasts for what the rate of unemployment will be at the end of this budgetary period. There is a complete lack of understanding on the part of the government with respect to jobs.

The government talks about its partnership with the private sector in creating jobs. I read a piece in the New York Times which talked about how the private sector in the United States has dealt with jobs over the last few years, a time of prosperity. AT&T has cut 123,000 jobs since 1990. Delta Airlines has cut 18,000 jobs. Eastman Kodak has cut 16,000 jobs. IBM has cut 35,000 jobs. Sears has cut 50,000 jobs. DEC has cut 20,000 jobs. Lockheed Martin has cut 15,000 jobs.

The Acting Speaker (Mr. Kilger): I regret to interrupt the hon. member. I am extending ever so slightly the question and comment period. If there is a question or if it is simply a comment, I ask the hon. member to please bring it to a conclusion.

Mr. Taylor: Mr. Speaker, while the hon. member has dealt with the question of the deficit, I wonder if he is concerned about the human deficit which unemployment is causing the people of Canada. Is he prepared to talk to the Minister of Finance to deal with it?

Mr. Cauchon: Mr. Speaker, it is amazing. The budget of the Minister of Finance is so good that opposition members are starting to switch from the question of the deficit per se to the human deficit.

Members of the Reform Party are very displeased with the result. They are displeased because we said in 1993 we would meet the target of deficit reduction and we did so. We did so in making sure we reached 3 per cent of GDP.

With respect to taking care of people, three years ago we launched the reform of the social safety net to ensure that once people have access to the benefits of the social safety net they will be able to access a very active program in order to ensure Canadians will return to the workplace as soon as possible.

(1615 )

Since 1993 we have created more than 500,000 new jobs. I must tell the Reform members that we will keep on working with the private sector and people in the communities at the local level to create more jobs. We will make sure that our small enterprises have the same access to the international market all over the world. We will then be able to create jobs with a responsible government.

[Translation]

Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ): Mr. Speaker, thank you for recognizing me; some people could go on and on and on.

Needless to say, my colleagues will speak on the budget in the days to come, analyzing it thoroughly for Canadians because there is a lot to analyze in this budget. They will examine its impact on the Canadian health and social transfer, on government downsizing, on dairy producers, on regional development and on several other points.

I think that all my colleagues will come to the conclusion that this really is a cosmetic budget which totally ignores the employ-

ment growth. And although the finance minister called it a ``job budget'' earlier, there is nothing in there to create jobs.

As for me, I would like to focus my comments on a sentence on page 6 of the budget, which says simply this:

-whatever the numbers might say, many do not see evidence of improvement in their own lives.

What the government has to say to them today can be found on page 8 of the budget speech, and this is the last time I will quote the budget speech, Mr. Speaker. It is a very short sentence which states:

Chronic deficits put the disadvantaged at risk, because it is they who suffer when the financial strength of government is so weak it can no longer reach out to those in need.

First, what it says is that there are no resources in Canada, that is primarily what is said. What people really need-the Prime Minister himself admitted it on many occasions-is to have a job. There must be job creation. However, we are told that there are no resources in Canada. This is what the government wants people to believe.

I want to say that there is no strong will to create jobs-and I will get back to that-because, fiscally, large corporations in Canada do not pay their fair share of tax. If there is a shortage of resources, it is precisely because the will is not there et because the tax system is inadequate.

As far as Quebec's resources are concerned, it is even worse, because the second point I want to make is that the federal government is depriving Quebec of its whole economic infrastructure.

So there is no strong will to create jobs. The central government, the federal government itself, tells us this: ``It is not my responsibility to create jobs. We will rely on the private sector for that''. However, companies are indicating that they are not responsible for job creation either, not in so many words, but in the way they behave.

(1620)

Companies are doing massive layoffs at a time when they are reporting record profits. I will quote a few figures, some of which were already mentioned by the hon. member for Roberval, the Leader of the Opposition, as well as by members of the NDP.

General Motors of Canada reported record profits of $1.39 billion, but still laid off 2,500 employees. The five big Canadian banks made profits totalling $4.9 billion but reduced their workforce by 2,800 employees. In 1995, Bell Canada's profits reached $502 million and the company cut 3,200 positions-and they are talking of creating a few summer jobs for students?-on top of the 8,000 that were cut since 1990. Petro-Canada recorded profits of $196 million in 1995 and cut 564 positions. Shell made $523 million in profits and cut 471 positions. Imperial Oil, with profits of $514 million, lais off 452 employees. And the government is talking about job creation.

If the government does not create jobs because, as it says, it is not its business to do so and if big companies, the major players in the economic field-we know that jobs are created by small companies in Canada-lay off workers, who will create jobs?

Yet, the government says on page 3 of its speech:

It will require the concerted efforts of individual citizens, their governments, business and others for our country to tackle these challenges effectively.

The truth is citizens and only citizens are asked to make an effort. That is what that means. Those words, on page 3, are a statement of principle:

It will require the concerted efforts of individual citizens, their governments, business-

In December 1993, the Department of Finance, in a document on tax expenditures, identified 288 tax exemptions available to businesses. The department said it was aware of the cost of 176 of these exemptions, which amounted to more than $17 billion a year, and admitted that it did not know the cost of the other 112. The lack of precise information on tax expenditures leads us to call for a review of our tax system. That is what the Bloc has been asking for since we came to this House.

Here is what the International Monetary Fund said, as reported in La Presse on December 8 of last year: ``Corporate taxes represent a smaller percentage of the GDP in Canada. This indicates that it may be possible to reduce some of their tax benefits.'' There is the

International Monetary Fund adopting the same position as the Bloc. That is where we should look first.

What is the greatest tax benefit used by large Canadian corporations? It is, of course, the use of tax havens.

It is difficult to obtain precise information on the extent of the tax avoidance phenomenon through the use of tax havens because of the lack of available data and the confidentiality rule which often applies in this area. Companies that do business abroad are not required to declare here the profits they declare in another country. Therefore, since they do not have to declare those profits in Canada, they do not pay taxes in this country.

There are several tax benefits related to tax havens. In 1987, the Minister of Finance made a commitment to study this issue; these studies have yet to be undertaken despite the insistence of the auditor general and the revenue department. However, it must be said that, in the 1994 budget, the Minister of Finance amended the Income Tax Act provisions related to foreign affiliates. These amendments were in accordance with the recommendations of the auditor general of the day and the Public Accounts Committee. But they will not prevent companies from using these tax havens.

It is difficult if not impossible to calculate the amount of tax revenues lost by Canada in these tax havens. However, several indicators can give us an idea of the extent of these losses.

(1625)

For example, in his 1992 report on tax havens, the auditor general, although it was not necessarily in his mandate to do so, said that it could reasonably be assumed that hundreds of millions of dollars in tax revenues had already been lost et would continue to be at stake in the years to come. This was in 1992. We are now in 1996 and it is still going on. The amounts lost have even increased considerably since then.

Tax exemptions for businesses operating in foreign countries can have two major effects. Some countries considered as tax havens have very low tax rates, hypothetically, in the 2 to 3 per cent range compared to 40 per cent in Canada. This difference leads to an unfair tax treatment which can cost the Canadian government millions of dollars.

The foreign affiliate can transfer its dividends tax free to the Canadian corporation, despite the fact that the income corresponding to those dividends was not taxed at a rate comparable to that in Canada.

I have at least another five or six pages on tax havens I could read. The important thing is to realize that tax havens do exist and that more and more companies are using them. Some companies even specializing in helping other companies use tax havens to avoid paying the Canadian government the taxes they normally should.

To deal with that issue and because the Bloc Quebecois has been asking for a review of taxation for two and a half years, the government has finally decided to set up a technical committee on business taxation, which will examine business taxation. As the hon. member for Saint-Hyacinthe-Bagot, who is finance critic for the Bloc, has already mentioned, those who will examine the taxation of businesses are all Canadian tax experts and some of them-not all, but a good number of them, the best among Canadian tax experts, as it has already been said during question period-are themselves using these tax havens.

The Bloc asked that a special parliamentary committee be set up to review taxation, but here we are with a technical committee. They have waited two and a half years before doing something. We asked for a public and open process and here we are with small groups working behind closed doors. We wanted a precise calendar. What we are told is that later this year, a report will be made which will be scrutinized by the public. This just puts it off indefinitely, just like the GST.

We wanted MPs to look at this issue so as to be able, on behalf of citizens, to review taxation. This is a bit like putting the fox in charge of the henhouse. It is well known that those who are going to examine the tax rules are the same persons who are going to advise the government on the taxation system and the same persons who are going to tell companies how to apply these rules in order to avoid paying any taxes.

This is the worst conflict of interest in Canada today. None is more serious. Those who make the tax rules are the same ones that help businesses take advantage of tax loopholes. By stretching the process out-if it takes one or two years as in the case of the family trusts-they give businesses time to review their tax strategy.

I would like to send an urgent message to Canadians who are anxious to understand what is going on in this area, because the government is really up to no good.

[English]

A few years ago Linda McQuaig wrote the book Behind Closed Doors: How the Rich Won Control of Canada's Tax System. This book explains fully how in 30 years the rich people in this country have taken control of the Canadian fiscality and do not pay any more taxes.

[Translation]

Linda McQuaig's book was also published in French under the title La part du lion. In it, she shows how rich Canadian families have used all tax loopholes available in order not to pay any Canadian income taxes.

What I just said concerns all Canadians. Every time there is excessive use of tax evasion, it means a loss of revenue for Canada and, as we now know, it is the little people, the future unemployed,

who end up footing the bill. They will start paying in the middle of the summer with UI reform.

(1630)

Things are even worse in Quebec. The employment situation in Quebec is worse than anywhere else in Canada, except Newfoundland. They are telling us-and they will continue to do so throughout the coming year-that all this is due to the political uncertainty in Quebec. Nothing could be further from the truth.

There are all kinds of sovereignist movements around the world; some are even in power. There is a sovereignist party in Scotland, the Scottish National Party, which has long had elected members to Parliament. They advocate Scottish sovereignty; one of their most famous propagandists is Sean Connery, the actor who first played James Bond, whom we all remember very well. Yet no one calls the Scots racist or xenophobic.

There is a sovereignist party in Taiwan, as I have said before in this House, the Democratic Progressive Party. In 1992, with 31 per cent of the vote, this party won 51 out of 161 seats in Parliament. No one in the world claims that political uncertainty in that country has led to economic uncertainty. On the contrary, everyone wants to do business with Taiwan, including Bombardier. Strangely enough, the President of Bombardier, who was complaining about insecurity in Quebec, has decided to invest in Taiwan, where the situation is exactly the same as in Quebec.

There is even a new sovereignist party in British Columbia, which is being built around Roger Rocan and is apparently supported by 12 per cent of the population according to the polls. We will never hear the Prime Minister talk about the big, bad separatists in B.C. That is reserved for Quebec. They would never say this to the people of British Columbia. On the contrary, in its analyses, the Fraser Institute goes as far as saying that B.C. would benefit from sovereignty. So they conduct studies over there but when we do the same here, we are big, bad separatists.

Since 1980, close to 40 new countries have joined the UN because it is the normal destiny of peoples to become nations and of nations to become countries. That is what the UN is for. There are even countries that have achieved sovereignty twice: Singapore, among others. In 1963, Singapore left the British empire to join Malaysia and, two years later, it seceded from Malaysia to become an independent republic.

The population of Singapore is half that of Quebec and is very cosmopolitan-in no way can it be considered homogeneous-with 80 per cent Chinese, 15 per cent Malaysians, 4 per cent Indians and 1 per cent people from other parts of the world, including a fair number of Canadians. All this in an area 2,500 times smaller than Quebec, that does not have any natural resources or energy resources. Anyone who travels to Singapore cannot help but notice that the leading foreign commodity is dirt on which to build by reclaiming land from the ocean. Singapore is a tiny country. No one denies that Singapore's economy is booming; economic success has nothing to do with the size or population of a country.

Responding to a question yesterday, my hon. friend from Saint-Denis, who is of Greek origin, stated that the idea of Quebec becoming sovereign bothered her. I would like to remind her, not without some pride, that we all are more or less Greek. Greece was the birthplace of science and democracy and, as you know, Mr. Speaker-you studied the Classics-we were brought up on that. All this to say that, were we to ask the Greeks tomorrow morning if they would be ready to give up their sovereignty and become a minority in some other nation, the answer would be no. I think therefore that the Greek community should understand Quebecers for wanting to do just like them.

Things are not going well in Quebec because our economic infrastructure is being drained away. A long time ago, it was decided to centralize all the economic activity in Ontario. Canadians did this for very good reasons. What were they? Geographically, Ontario is at the heart of the country. If you are going to centralize, you might as well do it in the centre, in the province with the largest population and which provides direct access to the heart of the U.S. market, cities such as Detroit, Chicago and Milwaukee, across the Great Lakes. The decision to empty Quebec of its economic infrastructure was made a long time ago.

Let me just tell you when this decentralization process started, because I had prepared a longer speech, which I probably will not have the time to finish.

(1635)

Somewhat surprisingly, our dear friend, Mr. Mordecai Richler, tells us in his book O Canada! O Québec when that decentralization started. He mentions it in a short sentence, on page 107, which I will read in

[English]

``Once the St. Lawrence Seaway was in place, diminishing the importance of our port-il parlait bien sûr de Montréal-and the Toronto stock market was doing more business than St. James Street, Montreal's slippage was inevitable''.

[Translation]

Once the St. Lawrence Seaway was in place, Montreal's slippage was inevitable. We are now witnessing the decline of Montreal. It started with the building of the St. Lawrence Seaway. We could go on about all the other decisions that were made concerning airports, the petrochemical industry, the Borden line, the money spent in Quebec by the government which is less than the standard 25 per cent, and also the new areas in which the federal government is about to interfere, including the securities business, as mentioned

in the speech from the throne. Once again, the government will centralize all that.

Given that Ontario's economic appeal was built from scratch, it is no wonder that foreign investors all want to move to that province.

This is the current situation. We have a budget which does not do anything about employment. It merely maintains the measures that were decided last year, such as taking money from the UI fund, reducing assistance to individuals and cutting transfers to the provinces. There is basically nothing about employment. Within that structure, all Canadians lose, Quebecers in particular.

The Acting Speaker (Mr. Kilger): First, I want to thank the hon. member for Anjou-Rivière-des-Prairies for reminding me of my studies at Cornwall's classical college. We now move to questions and comments.

Mr. Mac Harb (Ottawa Centre, Lib.): Mr. Speaker, my colleague has touched on several topics. He has spoken about the budget, and I will answer him on that, but first of all, let me reply to another point he has made. He made a comparison between Quebec and Greece, which did not want to be part of another country, whereas Quebec wants to be an independent country. This is too simplistic a comparison, because Greece has always been a country on its own, whereas Quebec has always been part of Canada.

He also drew a parallel with Taiwan, which is the same thing. Here we have an entity called Canada, in which the provinces have the right to govern themselves as they wish.

In 1867 there was the Canadian Constitution. There was an agreement delegating some responsibilities to the provincial level and others to the federal. In my opinion, our confederation is one of the world' finest. I am sure there are many countries that would gladly trade problems with Canada. We need only look at what is going on in Bosnia, Haiti, or other places where there are major problems to realize ours are relatively simple ones, readily solved if we make a concerted effort.

My colleague has indicated that the separatist groups in B.C., Quebec or other countries will one day see the light and realize they live in the best country in the world.

Now, for the budget. My colleague states that the government has not created any jobs. I would like to point out that, in 1995 alone, this government created 263,000 jobs. I would also like him to know that governments in general set an atmosphere that is favourable for private sector job creation. Finally, it is the private sector that creates jobs, not the government. Often, the government works in a partnership with the private sector in job creation, and that is precisely what this government has done. It has assigned a great deal of importance to the private sector so that it might create jobs. Among the examples of job creation I could offer my colleague, there is government investment in technology.

(1640)

There are, in fact, a lot of companies involved in research and development in the area of technology, which will receive direct benefits from the government. They will become direct and indirect partners of the federal government and will create even more jobs again in Quebec and across the country.

Inflation here in Canada is fairly low. Interest rates are three points lower than they are in countries comparable to Canada. As with deficit control, all these initiatives by the federal government will help the private sector create jobs.

I do not think my colleague was being fair in saying that the government is not helping create jobs. It is indeed distressing that Petro-Canada, Bell Canada and other companies have cut their staffs. However, we must not end up setting a quota for the private sector, requiring it to create a specific number of jobs. All we can do is ask and do what we have to to enable the private sector to create jobs.

The performance of this government over the past two years has been extraordinary. It is time my colleague in the Bloc rose and congratulated the Minister of Finance, the Prime Minister and the President of Treasury Board, because their efforts have been extraordinary.

Now I would like to say a few words about provincial jurisdictions and transfers to the provinces. Once and for all the federal Liberal government has set up a program to ensure the provinces fair, balanced and long-term transfers in the areas of health, post-secondary education and social services. The provinces can finally enjoy some peace in these three areas.

I must say my colleague in the Bloc Quebecois is perfectly right in saying that a lot more has to be done in job creation, but he still must rise and congratulate the government.

Mr. Pomerleau: Mr. Speaker, I hope that my colleague does not expect me to congratulate the government.

To start with, I would like to set the record straight regarding some of his comments. He said that Greeks have always been Greeks. If they celebrate Independence Day in Greece, it is precisely because they had to gain their independence. He said that we have always been part of Canada, and yet we were here well before Canada became a country. Lastly, he tried to tell us that we do not have that many problems in Canada.

I have been a sovereignist for a long time, but in Quebec, many became sovereignists in 1982. Why in 1982? Because that was when the basic agreement holding this country together was torn up; Quebec was excluded. And today we are told that it is not a problem. It is just as if two individuals had signed a lease and the owner had gone down into his basement to redraft every single clause of the lease, and the revised version became the real lease to

be used by all parties. The tenant would have every right to consider this a breach of contract.

In 1982, the Canadian Constitution was patriated, the terms were changed and no government in Quebec, even a federalist government, has agreed to sign it. Quebecers had some of their rights taken away. And today we are told that we should stop talking about it, that it is not important.

I am sorry, but the basic agreement in this country has been torn up. Quebec did not refuse to go along with the Constitution, rather, it was excluded from the Constitution. What we are confronted with today is the result, the consequence of this Prime Minister's actions. We must not forget that the current Prime Minister is the one who brought the Constitution back from England, the same one who is now saying: ``Stop talking talk about the Constitution; let us talk about real issues. I changed your lease, but never mind that, we love you very much; let us talk about real issues''.

I am very sorry, but that is exactly what we are planning to do: talk about real issues.

To my hon. friend, who says that 263,000 jobs were created, I will reply as the people of my riding would. Quite simply put: Where? That is what they would say: Where?

(1645)

People who go out for a stroll in downtown Montreal notice all the stores that are closed. I was a carpenter in a previous life. Today, there is nothing left for carpenters in Montreal, neither construction work nor retail stores. Half the stores are closing their doors. Where are these 263,000 jobs he is talking about? In light of the long list of businesses that have to lay off workers, I wonder: where are these 263,000 new jobs? I realize that this is what statistics say, but what the people want to know, however, is: Where?

Finally, there is this nice initiative to stimulate job creation. We had one in place in Quebec: the RRSP of the FTQ investment fund. This was the only tax measure that promoted any real job creation, and they just chopped it to create, maybe, a few student summer jobs. I do not know how many exactly. Student summer jobs are being created, while at the same time, measures truly capable of creating employment in the long run are being chopped.

On the one hand, they will be giving students a few jobs for the summer, but on the other hand, by cutting transfers to the provinces, they are making their school fees go up. Where is the logic in that? Personally, I can see none. If the government deserves praise for anything, it is for helping us show the public that we no longer have our place in there. With 25 per cent of the voting shares, you have no power over the company. When this company is going bankrupt, it is time to pull out.

[English]

The Acting Speaker (Mr. Kilger): I understand there had been a change in terms of the rotation of speakers. Therefore the House will now be apprised of the rotation following consultation with our table officers. I will look to the government for speakers. I will then look to the government to bring the rotation back up to speed, return to the official opposition, then look to the government and, last but not least, to the Reform Party.

Should there be any questions please raise them with our table officers so that you can organize your schedules accordingly. You get on my list only once you are on your feet and you are recognized. Ultimately the list is blank and we will start now with the hon. member for St. John's West. I ask her co-operation in indicating to the Chair who she might be splitting her time with.

Mrs. Jean Payne (St. John's West, Lib.): Mr. Speaker, I will be sharing my time with the hon. member for Vaudreuil.

It is with great pleasure that I rise to speak on the debate on the budget. The Minister of Finance last night presented to Canadians a budget that is fair, compassionate and visionary.

Last night, as part of my budget night activities, I held a teleconference with representatives from industry, municipal governments, business, social services, education and health in my riding of St. John's West, all of whom wanted to convey their reaction to the budget.

While these individuals had some concerns, the reaction to the budget was largely positive. While my colleagues on the other side of the House earlier mentioned that the Chambers of Commerce were not in favour of the budget, last night I had representatives from the Chamber of Commerce who were very positive about the budget and had nothing but good things to say about it.

I will now touch on some of the key points raised during the teleconference and discuss the impact on my riding of St. John's West. As a government not only are we meeting our deficit reduction targets, we are surpassing them. The budget ensures that we will meet our red book commitment of reducing the deficit to 3 per cent of GDP within our first three years in office.

In addition, by 1997-98 we will be meeting our new interim target of 2 per cent. By 1997-98, due to the consistent efforts of the Liberal government, the economy will finally be growing faster than the debt, the first time since 1974-75.

(1650 )

Program spending will be reduced by 12 per cent of GDP by 1998-99, which translates in the lowest level in 50 years. Also, Canada's fiscal requirements will be cut by $6 billion in 1997-98, the lowest of all the G-7 countries.

Earlier my colleague from the third party spoke about fishery violations and offences occurring and he went through a great litany of these violations taking place on the west coast.

For his information, the department of fisheries raised its enforcement budget to provide greater enforcement. The government cannot possibly have enforcement offices at every location to control all the people who want to violate our fishery agreement.

The residents of St. John's West are particularly pleased that there are no tax increases in the budget, no increases in personal income tax, no increases in corporate tax and no increases in excise tax. The government has not increased personal income tax since we took office three years ago.

Canadians have told us they want the deficit and the debt reduced, but they also want to protect the most vulnerable, and the people of St. John's West are no exception.

Again the finance minister has listened to Canadians and has safeguarded our social programs for the next century. Over the next five years the CHST, federal transfers to the provinces for health, post secondary education and social assistance, will be maintained. Funding will remain constant at $25.1 billion for the first two years and will actually increase over the three remaining years.

Although the initial cash component in Newfoundland's CHST will decline initially, transfers will resume growth some time over the five-year arrangement. The federal government is guaranteeing that the cash component of the transfer will never be lower than $11 billion during this five-year period. Newfoundland will benefit from the tax component as well as from the cash guarantee.

Also, by putting a floor of $11 billion under the cash part of the CHST, the federal government is ensuring the principles of the Canada Health Act can and will be enforced throughout Canada.

A new seniors benefit will replace the existing old age security and guaranteed income supplement. This new system is designed to help those who need it most. In my riding of St. John's West there are many single seniors and many senior couples who live on incomes well below $40,000 a year. To these seniors I want to say they will be as well off, indeed better off, than they are under the current system.

The new benefit will be tax free and fully indexed to inflation. The new system targets those who need it most and ensures the system is sustainable in the future.

In keeping with our red book commitment, the federal government is introducing a new child support system. These changes were a long time coming and are long overdue. The child support paid under the orders or agreements made on or after May 1, 1997 will no longer be taxed as income to the recipient, nor will it be tax deductible for the payer.

The federal government will introduced guidelines to assist parents, lawyers and judges to see that fair and consistent child support is awarded in divorce cases. The federal government will introduce comprehensive measures to help provincial enforcement agencies ensure that support is paid in full and on time.

The maximum level of working income supplement of the child tax benefit will double; it will increase from $500 to $750 in July 1997 and will increase again to $1,000 in July 1998.

Jobs and economic growth continue to be the government's top priority.

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Since we took office in 1993 the Liberal government has and will continue to provide the private sector with an environment for growth. The economic climate in Canada is improving. Interest rates have declined three percentage points in the last year. Inflation is at its lowest level in 30 years and Canada's economy is more competitive now than ever.

More than 500,000 private sector jobs have been created. With this in mind the Liberal government is investing in the future. No longer do we have the resources to do everything. We must make some strategic choices. We must invest in areas where we can get the biggest bang for our buck.

The federal government therefore is reallocating existing funds into three areas, youth, technology and trade. We are providing an additional $165 million over three years to help students and their families deal with the increased costs of education. The government has increased education tax credits, raised the limits on the transfer of tuition fees and education credits, and increased the limits to contributions to RESPs. Also, the eligibility for the child care expense allowance will be broadened.

The government will also provide $315 million over three years to create new youth employment opportunities. We will double funding for summer student jobs. We remain committed to Team Canada style partnerships between business and government in order to create entry level jobs for youth.

I understand the Minister of Industry will soon announce technology partnership Canada, which will encourage develop-

ment of the environmental technologies, advanced manufacturing of material as well as biotechnology. In addition, funding to the Federal Business Development Bank will increase so that the bank will be able to provide more loans to knowledge based exporting and growth businesses.

The government is assisting small business by bringing it all of the advantages of access to the information highway. We are introducing a program in which 2,000 computer students will connect to some 50,000 small businesses on the Internet.

Canada's trade performance in the last few years has been nothing less than remarkable. Team Canada's approach has proven a major success with $20 billion in new business deals resulting from three major trade missions led by the Prime Minister.

Exports are vital to the creation of jobs. Every billion dollars in exports translates into 11,000 to 12,000 new jobs. Because export financing is so critical, the government will provide $50 million to the Export Development Corporation for further innovative types of export financing.

I will briefly mention the measures taken in relation to RRSP and RPP limits to increase flexibility for individuals saving for their retirement. A seven-year carry forward for RRSPs is being removed to permit individuals to continue to save for their retirement. The age limit for maturing RPPs and RRSPs will be reduced from 71 to 69. RRSP limits will be frozen at $13,500 through to the year 2003 and then increased to $14,500 in 2004, and $15,500 in 2005. These measures will limit the cost of the tax deferrals associated with retirement savings, while ensuring tax assistance is targeted at modest and middle income Canadians.

This is a fair budget, a realistic budget and a compassionate budget. While the economy is finally improving, the government must continue to stay the course on debt and deficit reduction. We have made some tough choices to ensure the programs we cherish as Canadians will continue into the next century. This budget will ensure that.

Mr. Jay Hill (Prince George-Peace River, Ref.): Mr. Speaker, I listened attentively to the honourable member. Quite frankly, I am getting sick and tired of the government's trying to brag about bringing the deficit down to 3 per cent or 2 per cent of GDP. I find that totally misleading for the general population. The government likes to quote that number because it is a small number, when in reality it should be talking about the debt and its percentage of GDP. That number is considerably higher. The debt to GDP ratio is more like 73 per cent.

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The hon. member quoted statistics. She seemed to enjoy quoting statistics to tell us how wonderful Canada is doing and how great the government is doing. She mentioned that Canadians want the deficit and debt reduced but they also want those who are the most vulnerable in society protected. It is interesting that she mentioned not only the deficit but the debt in that statement. Canadians want the deficit and the debt reduced.

Let us talk about the debt for a minute. The debt under this Liberal administration has grown since 1993-94, when it was about $508 billion, to a projected figure for next year of $602 billion. That is an increase of almost $100 billion.

The hon. member talked about revenue in her speech. She mentioned that there have been no increases in personal income tax. She might be right about that, but revenues have increased dramatically. Revenues have increased from 1993-94 when they were $116 billion to a projected figure in 1996-97 of $136 billion, an increase of about $20 billion of increased income from the taxpayers.

Those are the real numbers that count, not the deficit but the debt. The fact is that the interest charges on the public debt have increased from $38 billion in 1993-94 when the hon. member's government took office to a projected $49 billion of interest charges for next year, an increase of $11 billion. Those are the numbers that Canadians should be concerned about. Those are the numbers that present the most serious threat to Canada's social programs.

I would like the hon. member to address those numbers when she is talking. I think it is totally irresponsible of the government to be talking about reducing the deficit when the debt continues to grow at an alarming rate.

Mrs. Payne: Mr. Speaker, I want to thank the hon. member for his comments and for the statistics that he quoted.

If we were to listen to what the members across the way would do, they would reduce the debt to zero before the end of this year. I cannot help wondering what would happen to those people in my riding in particular who are dependent on the social programs, the elderly who are dependent on old age pensions, the young people who need to be able to get assistance to continue their education.

This party earlier this year said that it should reduce social housing by $11 million. What would that do to the social programs in ridings like mine? These people talk a good talk, but they do not walk a good walk. I am afraid that their program is not acceptable.

The program that we have under this budget is an acceptable one. It is fair, as I said before. It is a compassionate budget and it is one that will work for Canadians.

Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I had several points that I wanted to make but I will restrict myself to one comment in respect to the speech of the member for St. John's West who is trying to tell us about this compassionate budget, this feel good budget and this budget that basically does nothing. I call it an economic statement.

The hon. member says the government is trying to protect the seniors, the helpless and those in need, yet transfers to bankers, to foreign lenders and to rich people are going up by $12 billion. That is reality number one.

With three million seniors that works out to $4,000 a senior that the government is going to transfer to lenders rather than transferring it to the seniors. My question is short. How can this government and this member say that this is a compassionate budget when the money is going abroad? It is going into the pockets of rich people and the government is ignoring the old, the poor and the helpless and the needy.

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Mrs. Payne: Mr. Speaker, the hon. member opposite did not hear what I said. The budget does address the needs of seniors. It addresses the needs of young people. It addresses the needs of the people who need it most. It addresses the needs of women who have been living well below the poverty line and who, for the first time, are seeing their incomes increase.

This budget does take care of those who need it most.

[Translation]

Mr. Nick Discepola (Parliamentary Secretary to Solicitor General of Canada, Lib.): Mr. Speaker, I am proud to take part in this debate on our third budget, and especially to point out that, in the last two and a half years, Canadians have relied on the government not to create jobs but to generate a social and economic climate conducive to economic growth and job creation.

We are also proud of our achievements thus far. In fact, since we came to office, the unemployment rate has fallen by 2 per cent and some 500,000 jobs have been created, most of them in the private sector and almost all of them by small and medium size businesses, of which I am proud. That said, there is still much to be done. Unemployment is still too high and Canadians, especially young people, are concerned about future jobs.

We intend to take lasting and meaningful measures. Rather than relying on short term direct spending programs, we will take a more productive approach by focusing on co-operation with our partners and strategic investments to give the forces of economic change an incentive to create jobs.

But let us start at the beginning. To secure the sustained economic growth we need to create new jobs, we must first guarantee the basic elements of the Canadian economy by reducing and eventually eliminating the deficit. Chronic, large deficits go hand in hand with high interest rates. High interest rates, in turn, discourage investment, borrowing and consumer spending. Ultimately, they have a detrimental effect on employment.

We must also keep inflation low, since it reduces pressure on interest rates and results in lower overhead for companies. It goes without saying that keeping the operating costs of a Canadian company at a minimum level promotes investment. This, in turn, helps create jobs.

Today, we are reaping the benefits of our efforts to tackle the deficit and control inflation, which is at its lowest level in 30 years. Short term interest rates have already gone down three percentage points since the last budget, and we have made major progress in terms of our competitiveness, as indicated by the unprecedented level of our exports. However, there is an obvious need to maintain and even increase our efforts in order to ensure the future of Canadians.

In addition to providing a solid economic framework, we took a hard look at what more we can and must do. Some issues are so vital for Canada's future that they warrant a significantly greater effort on the part of the federal government. Our youth, in my opinion, is one such area.

The unemployment rate for young people is around 16 per cent, which is one and one half times higher than the national average. The transition from school to the labour market must be looked at. Our young people are our greatest asset. They are the key to the future. They need higher education, since this is vital for any job. They also need more assistance in finding that all-important first job.

We have a plan. The programs announced include Youth service Canada, Youth internship Canada, as well as the summer employment program for students. In addition to these initiatives, the student loans program, whose budget provides for an additional $556 million, will include the negotiation of loans totalling over one billion dollars and will help more than 360,000 students.

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The 1996 budget also calls for new measures to enable young people to meet the challenge of the labour market, so that future generations will be able to keep pace with the remarkable changes in the world economy. To that end, we have inaugurated an apprenticeship program. As the result of rearrangements within the taxation structure, these new measures will make it possible to free up an additional $165 million in the form of tax assistance to students and their families.

This program has three main components. First, there is additional tax assistance to students, through a 25 per cent increase in the education credit, that is to say from $80 to $100 per month. The budget also proposes a 25 per cent increase in the ceiling for

transfer of tuition and education credits to family members who are supporting students.

Second, savings to finance education over the long term are eligible for assistance, because the annual limit for contributions to registered education savings plans has been increased.

Assistance is also available to single, low income parents, by authorizing the child care expense deduction from any kind of income when the single parent is also a full time student. This applies to secondary students. Two parent families are also eligible for this deduction if both adults are studying at the same time. The age limit for this deduction will also be raised to help parents of older students.

Implementation of tax rules in favour of education is a first step. However, young Canadians need much more than educational opportunities in order to get a job on the labour market. They need professional experience.

We first provided for on-the-job training by re-allocating $315 million over three years to help create job opportunities for young people. These funds will combine with the $700 million we set aside for this year for youth internship Canada, youth service Canada and summer employment programs.

As an initial intermediary stage, the budget will double our commitment to the summer employment program from $60 million to $120 million.

We are concerned not only about young people, but about the burgeoning technologies that are changing our universe. In short, innovation feeds productivity and growth, which underlie the jobs of tomorrow. We have a job to do to stimulate Canada's creative abilities.

The initiatives currently in effect include changes in the type of work done by the National Research Council in areas such as biotechnology, telecommunications and the latest in manufacturing and infrastructure technology.

We are working closely with the private sector in projects such as CANARIE, which is aimed at speeding up the establishment of high speed electronic networks. Furthermore, we are encouraging the expansion of new technologies in small businesses under the industrial research assistance program.

Here again, we want to do more. We are re-allocating $270 million worth of savings over three years to promote innovation and technology. This measure provides for the creation of technology partnerships Canada, a fund to stimulate the development of environmental technologies, high tech manufacturing processes and biotechnologies. It will also help maintain jobs in the aerospace industry, which is facing fierce highly subsidized foreign competition.

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We will give an additional $50 million to the Business Development Bank. This money will enable the institution to loan an additional $350 million to knowledge-based, and growth businesses.

Moreover, we are creating a program under which 2,000 computer students will help connect 50,000 small businesses to the Internet.

Last but not least, trade, which is at the heart of the Canadian economy. We export a third of what we produce, providing work for millions of people.

In this budget, we are allocating a further $50 million to the Export Development Corporation. We are reallocating resources from concessional loans to foreign borrowers to finance higher volumes of non-concessional financing under an improved system of risk management. This measure will permit an increase of up to $500 million of year in the financing available to Canadians exporters.

To conclude, I will say that the private sector is our most important and most astute innovation mechanism. Young Canadians are our most solid hope for the future. And trade is one of the most powerful means to create wealth. We are investing in these three areas.

The framework is in place. The economic situation is improving. The fundamentals to create partnership are in place. We are being true to our commitment to provide opportunities in the areas of education and modernization, as well as job opportunities for young people in the next century.

[English]

Mr. Harold Culbert (Carleton-Charlotte, Lib.): Mr. Speaker, I listened with great interest to my colleague's comments on the budget that was tabled by our Minister of Finance late yesterday afternoon. Like many in this House, one of the things I have heard on many occasions is that the best social program in this country is an opportunity for a job. As the member across the way so capably mentioned, one of the things presented in this budget is that opportunity.

I wonder if the parliamentary secretary has had an opportunity to speak to his business constituents in his riding. I had the opportunity this morning to speak to a number of key businesses in my riding and I will be speaking to others over the next few days to get their input and feelings on it. The business representatives I spoke with this morning indicated that it was a very positive budget and that it did set the tone. They were pleased to see that the government is getting our financial house in order, that the lower interest rates would certainly be beneficial and that they would be increasing their employee base. They agreed that with their additional exports there would be further employees coming.

I wonder if the parliamentary secretary has had an opportunity to speak to some businesses in his constituency and what type of reaction have they provided.

Mr. Discepola: Mr. Speaker, in response to my colleague's question, I have the opportunity to point out that our job as a government is not to create jobs. I remember during the election campaign that when any politician stood up and said that he or she was going to create so many thousands of jobs, he or she was ridiculed by everybody because it is not our job to create employment. However, it is our duty as a government to create the appropriate climate to stimulate job creation measures, et cetera.

If members look at what we have done over the past two or three years through the initiatives of our Minister of Finance and the support he has received from the Prime Minister and colleagues, we have put in place a firm foundation for companies through measures such as reduced interest rates for example.

Last year alone I remember interest rates dropped by almost 3 per cent. Inflation is quasi non-existent. If we analyse those companies that are making profits today, it is those companies in the new technologies and exporting that have been successful over the past three or four years. Therefore, when we can encourage and create the climate that is appropriate for job creation measures then I am confident that jobs will be created.

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We have been criticized by members of the Reform Party who say that we have not done anything. However, I would like to raise a point for the information of members. The measures we put in place in 1994, because of the compounding effect from year to year to year, by fiscal year 1998-99 will have a net effect of close to $45 billion in savings. Compounded with the measures we have put in place in the second budget, there will be another $43 billion in savings.

This is phase three of a fantastic, sound footing which I am convinced will put us into the 21st century hopefully with the elimination of the deficit. The strong footing will encourage investment in the country. If we could get the political stability, I am convinced investments would come and job creation would follow.

Mr. Maurizio Bevilacqua (York North, Lib.): Mr. Speaker, Canadians will not be left behind. There is no question the world around is changing. Fifty years ago fax machines, cellular phones, the Canada space arm and fibre optic surgery were only seen in science fiction movies. Today they are part of our everyday life.

Fact: the world is changing. Fact: our lives are changing. Fact: some countries will be left behind. Fact: Canada will not be one of them.

Certainly our labour market is changing. Machines are doing some of the jobs people used to do. However, people are doing some jobs we never thought would be possible. We are building the robots that now do the heavy lifting and exploration of mines. We are designing the fibre optic cables that allow people on different continents to conduct meetings and exchange ideas. We are developing the vaccines to combat disease that had previously wiped out entire populations. Certainly, the world is changing but we are leading the revolution.

The 1996 budget tabled yesterday by the Minister of Finance will allow us to continue to set the pace for other countries to follow. This Liberal government recognizes that Canada is a rich country, a country rich in resources: natural resources, its people, its youth. We also recognize it is our responsibility to create opportunities for present and future generations of Canadians, and that is what we have done.

The challenges that face our youth are clear. The youth unemployment rate is roughly double the national average. Roughly 45 per cent of new jobs created between the year 1990 and the year 2000 will require more than 16 years of training and education.

What is the federal government doing to offer young Canadians a brighter future? More than any other government in Canadian history, we have been devoted to achieving positive change in the lives of young people. To quote the Minister of Finance: ``The economy of the future will belong to our young people. The success of our economy will depend on them, just as their success will depend on their ability to fully participate in all that the economy has to offer''.

Post-secondary education is an important step toward achieving meaningful full time employment. Our government recognizes that. That is why the 1996 budget announced measures to increase Canada's investment in our youth. After all, if our future is to be brighter, we must invest in it. To that end we have introduced a learning package. These measures will provide an additional $165 million in tax assistance to students and their families. However, getting the tax system to work in favour of education is just the beginning.

In addition to these measures we have further improved access to post-secondary education by providing more flexible repayment terms for Canada student loans. That, plus our previous $2.5 billion increase in the amount of federal assistance available through our Canada student loans program clearly demonstrates our government's commitment to providing Canadians with the opportunity to pursue lifelong learning.

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As chair of the Liberal Party's task force on youth, as Parliamentary Secretary to the Minister of Human Resources Development, as a member of the human resources committee and as the member of Parliament for the riding of York North I have spoken to tens of thousands of young people across the country.

I spoke with high school dropouts who still have dreams to one day have good paying jobs. I spoke with a 19-year old single mother who wants to be an accountant. I spoke with a young man from Newfoundland who wants a job he can go to year round. The desire to work, to grow and to succeed is there. It just needs some help to flourish.

How many times have we heard a young person say that he or she cannot find a job because he or she does not have experience: ``How can I gain that experience if I do not have a job?'' That is the paradox in the lives of so many young people in our country. These are indeed tough questions. Our government has attempted to find some answers.

In April 1994 our government announced the youth employment and learning strategy involving, among other initiatives, the youth internship program and Youth Service Canada. Our government is maintaining its $700 million in funding over the next three years for these programs. While past governments have run make work projects for young people, Youth Service Canada and the youth internship program focus on providing participants with tangible, hands on experience.

Youth Service Canada provides employment skills built on community needs. Students gain valuable work experience that will help them make that very important transition from school to work. The community gains the energy and enthusiasm which only the young can bring to their work. The youth internship program works because it builds partnerships between employers and educators, teaching hands on skills to young people. The focus is on jobs and careers with a future. The theme is innovation.

For example, last year I announced a special program for the automotive industry. When we look under the hood of a new car we see how technology has changed the industry. I read recently that the computers in new cars are worth more than the steel. This requires people with up to date skills. It requires a new generation of highly skilled workers. In turn, that requires a new partnership with the private sector.

The youth internship program is an excellent example of partnership and co-operation. Chrysler Canada and other major car manufacturers donated engines and guaranteed on the job training spots to participants. We brought on board a major corporation to do its share to help tomorrow's workers.

In addition to maintaining funding for Youth Service Canada and the youth internship program, this year's budget announced the government's plans to reallocate $315 million in budget savings for additional on the job training which includes doubling the funding for student summer employment placements. It is a wise investment. In 1995 alone more than 52,000 jobs were created thanks to the student summer job action. Our Canada employment centres for students placed over 175,000 students in jobs during that summer.

How does this Team Canada approach apply locally in my riding? I will tell the House about another effective partnership between government and the private sector which I announced last week.

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The government teamed up with Tetra Pac Inc., a forward thinking company in my riding. We each contributed $100,000 to an initiative called ``Completing the Circle''. The Career Foundation, an active training establishment in York North, is using these funds to match unemployed residents with available jobs in the riding. One hundred participants will receive pre-employment and on the job training, followed by a placement in a job with a future. This, my friends, is co-operation. This is team work, this is Team Canada in action.

Speaking of jobs with a future, there is no greater growth area than high tech. Look in the career section of any paper. Where are the jobs? Computers. Look at page 76 of the budget plan and what do you see? Computers.

The 1996 budget outlines a plan to enlist the help of 2,000 students to help connect 50,000 small businesses to the Internet. What a great idea, students and small business owners helping one another.

Another successful program I helped develop in my riding, one that I am extremely proud of, is VaughanTec. It is truly an employment strategy with a future. VaughanTec recruits young entrepreneurial residents of York North with an interest in technology and provides them with the skills and knowledge required to become successful high tech entrepreneurs.

Through classroom training, skills development and concrete work experience, these young entrepreneurs develop the tools they will need to seek employment or create new businesses in this rapidly developing sector.

As these local examples demonstrate, the private sector is our greatest and most appropriate medium for innovation. Canada's youth are our strongest foundation for our future. The framework is in place. The economic environment is improving. The partnerships are proving successful. We are following through with our commitment to providing opportunities. Canada will not be left behind.

Mrs. Daphne Jennings (Mission-Coquitlam, Ref.): Mr. Speaker, I agree that jobs are necessary. I agree with the parliamentary secretary who spoke previously. He sounded like a Reformer. It is not the government's job to create jobs but rather to create an economy that is healthy.

I am concerned, though, that the budget offers no tax relief. The hon. member for York North spoke very inspiringly about students, the desire for jobs, the desire of the government to create jobs, the desire of the government to make sure jobs are there, technology and everything like this.

There is no tax relief and yet the government is trying to create a climate that will encourage businesses. I heard the Prime Minister say to businesses: ``Now it is your job. You go ahead and create the jobs, we have done what we can do''. I am a bit confused because it is very difficult for the market, for a health economy to exist if there is no tax relief.

How will businesses have the finances, the will, the profits? How will they create these jobs? Where will the consumer confidence come from? I would like a realistic answer from the hon. member for York North.

The budget did not create that confidence. It did not build the economy. It did not give us any indication that now there will be a lot of jobs for students. I feel it is the economy that has to have some kind of encouragement. I did not see that in the budget.

I wonder if the member could please explain to me how, with no tax relief, businesses will suddenly get all this inspiration and turn things around in the economy and offer the jobs the government feels they should.

Mr. Bevilacqua: Mr. Speaker, I thank the hon. member for finding my speech inspirational. One of the reasons I delivered it was to make sure people across Canada understand that when people come together and pool the resources available we can bring about positive change to people's lives.

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One of the things I do not agree with is that somehow Canadians are lacking confidence. I know that when I speak to Canadians from coast to coast what they are telling me about the government is that for the first time in a long time they believe our budgets.

We are telling them we will reach 3 per cent of GDP on the deficit. We will be going down to 2 per cent. They also gain a lot of confidence from the more than 560,000 jobs that have been created since the election on October 25, 1993. That is good news for Canadians. They understand that we have low interest rates and that the fundamentals are there for small business to create those jobs.

I agree with the Prime Minister, the Minister of Finance and members of my caucus who are saying to the small business sector and to the business community that they have to join with the rest of the Canadian family to generate the jobs required, in particular for our young people.

I cited a couple of examples of the type of work I have been doing in partnership with local stakeholders in my riding which is are actually creating jobs for people. We live in an era of constant change. The old rules simply do not apply. We need to be creative and innovative to generate the type of job creation Canadians are calling for.

I do not view this in a very self-defeatist way. The people in my riding of York North are quite excited about the change that is occurring. That is why initiatives like the Vaughan Technology Enterprise Centre, the York Region Strategic Alliance and the recent activities with one of our major corporations, TetraPak, are bearing fruits and bringing about change.

It is the responsibility of all members of the House to join forces with local stakeholders to create those much needed jobs for the Canadian economy.

[Translation]

Mr. René Laurin (Joliette, BQ): Mr. Speaker, this week's budget is nothing new. There is hardly anything to talk about, since this budget contains no measures that are really new. We realized that, for the next few years, the government has decided to ride the wave that brought it to power in 1993 and to stick with the measures that had been decided at that time-some of which, it must be said, were unpopular. The government has decided that, since these measures were announced two years ago, they did not have to be modified or supplemented by other measures.

In other words, the government is thinking that the blows it dealt to Canadians-some of whom it even clobbered-have caused enough pain, since some of the measures will come into effect this year. Some of the decisions made in the 1994 and 1995 budgets will take effect this year and others next year.

So, of course, the government is looking good, saying: ``We will not impose any drastic, unpopular measures this year''. No wonder, since those measures have already been announced in previous budgets.

At the same time, the government has decided that, by adopting this new budget, it will still impose measures, although these will not take effect right away.

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These measures will be implemented in five years, so that taxpayers will not panic but think: ``This may be bad news, but at least we have five years to prepare for it''. We have five years to brace ourselves. It is as though people were saying: ``Who knows? Many things can happen in five years, so perhaps there will be a miracle and today's bad news will not materialize in five years''. This was the government's strategy in tabling this budget, which in fact is designed not to frighten anyone but which does not help improve the situation in any way.

Let us examine some of the measures one by one and see what great plans the government has. Let us start with the national debt.

When the government was first elected, in October 1993, Canada's national debt stood at $508 billion. Today, in the 1996-97 estimates, the federal debt is forecast to reach $602 billion. Next year, last year of this government's rule, the debt will have risen to $619 billion.

For most people, it is difficult to imagine an amount of that magnitude. What does $619 billion represent? When you win $1 million at the lottery for example, you know that $1,000,000 is this figure with six zeros. When you deal with billions, one billion equals one million millions. The government debt is 609 times one billion. Just in the past few years of Liberal government, since 1993, this debt has grown by $110 billion or $112 billion. That is a lot of money.

If the government managed to save, say, $5 billion-or five million times $1 million-every year by making sure that its income was $5 billion higher than its expenditures in its budget, at that rate, by putting $5 billion per year toward repaying the amount by which the debt has increased so far during the Liberal government's mandate, it would take 21 years to repay. This means that, in four short years, the Liberal government has moved us back 21 years. And that is just for the debt incurred over the past four years.

Now, if we were to apply this to the total debt, which is $620 billion, or $619.7 to be more precise, and decided tomorrow morning to repay this debt, by managing wisely, at the rate of $5 billion per year-That is a lot of money, you know. In the past 25 years or more, we have never managed to save that much in just one year in Canada. Every year, for 20 or 25 years, we have accumulated budget deficits. Instead of accumulating surpluses, we accumulated deficits. This means that we spend more than we save.

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Let us assume for a moment that the reverse is true and that, tomorrow morning, through sound management, we were able to save $5 billion and use that money to repay the accumulated debt of $620 billion. It would take, listen to this, Mr. Speaker, 120 years to pay off Canada's current debt. So, 120 years to repay the debt. Needless to say that none of us will be around to see that. I do not even want to think about it, because it would be so appalling. It just does not make any sense.

Imagine how much hope and determination one needs to say that this country needs, for the next 120 years, budgets that will allow it to save $5 billion. Right now, we are not able to lower the debt. We barely manage to marginally lower the deficit. And we do so through artificial means. The government says: ``The deficit went down from $42 billion in 1993-94 to $24 billion in 1996-97, an $18 billion reduction''. However, there is still an extra $24 billion added on to the debt. Next year, we will look at 1997-98. It is anticipated the deficit will then be around $17 billion.

How did the government manage to achieve these deficit reductions? It did not do so by spending less but, rather, by using two main strategies. First, it gives the provinces less money than it used to for social programs and services, health and education being the main ones. This year, in comparison to previous years, the provinces will suffer a $2.5 billion shortfall. Next year, it will be $4.5 billion, for a total of $7 billion.

For Quebec, this means a shortfall of about 25 per cent. In other words, this year our province will receive about $650 million less in transfer payments. Next year, the shortfall will be about double that amount, that is $1.2 or $1.3 billion.

At this rate, I am not sure that many people would still say that Canada is the best country in the world, as is so often claimed by the Prime Minister. At the rate of $5 billion per year, it would take 120 years to pay off our country's debt of $620 billion. If this is the best country in the world, I do not want to hear about the others. It must simply be terrible. Imagine, if that is what the finest and the best looks like.

Clearly, the situation cannot continue as it is, and clearly the government's presentation of the budget in this form is what the leader of the opposition has most aptly called a cosmetic operation. It is an operation which seeks to disguise, to cover up, the magnitude of our economic ills. It is an operation aimed at making people forget that decisions were made two years ago from which there can be no going back. It is also an attempt to make people forget that decisions made to-day will kick in in five years time, whether we like it or not. Which ones are they?

I am referring to the Canadian Social Transfer. This is $7 billion, and we know that implementation has begun. The government has not had to make any new statements; they know that there are $4,5 billion that will not go out to the provinces this year. I had started to talk about how that was financed, as the government knows very well.

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I said that the government was financing this, financing the reduction of its deficit in two ways, but I gave just one.

I spoke of the Canadian Social Transfer, where it recovered $7 million, but there is another way. When the federal government decides to collect money, I do not think it can be trusted. As soon as it gets its grubby little hands on some money, you cannot be sure what it will do with that money. Think of what happened to Canadians' unemployment insurance contributions.

There was a time when the federal government participated in the unemployment insurance fund, putting money into it to help out those who were unemployed. However, in recent years, the unem-

ployment insurance fund has been fed only by employee and employer contributions. Only those who work pay in contributions, with their employers. This money is what is will be used to pay unemployment insurance to those who, unfortunately, are out of work.

Now in the past two years, the unemployment insurance situation has improved so significantly that a sort of unemployment insurance profit has been made. In other words, more money is coming in from workers and employers than is being paid out for unemployment-$5 billion last year.

In all fairness, this figure of $5 billion should go to the workers and employers from whose pockets it all came. However, as employees and employers trusted the government, they have said: ``You are a trustworthy body, you will collect this money for us and will keep it in reserve, in the bank, and when you need it, you will give it to us for the unemployed''.

The government, which already had this responsibility, decided to keep it, of course, because that would also allow it, until the money was needed, to make whatever use of it it felt justified.

When you put money into the hands of someone who needs it, is it not a great temptation for that person to use the money until the unemployed need it? Since the government is running a deficit, and needs money to look good, to be considered a good manager, when it sees $5 million not being used, it grabs it saying: ``I will pay it back later, if the unemployment insurance fund ever runs a deficit''.

In other words, when employers and employees decided to put their UI contributions into the hands of the government, without reservation, it was as if the fox had been put in charge of the henhouse.

The English have a another way of saying that. The Minister of Finance, who comes from Quebec, often uses the expression: ``Do not put the rabbit in charge of the lettuce''. For Quebecers who may not have understand, it means that to keep the lettuce, we should not give it to the rabbit or else, when time comes to eat the lettuce, there might be some missing.

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That is roughly what happened with the unemployment insurance fund: the government acted like a fox, or like a rabbit in front of a box full of lettuce. With its growing appetite-and we know how voracious the government can get-it took a large helping. Indeed, it took $5 billion paid by workers and employers and said: ``With this, I can reduce the deficit by $5 billion''. Adding $5 billion to $7 billion, we get the $12 billion that are not being transferred to provinces: ``Mission accomplished, we have reduced the deficit by $12 billion''.

That is why, in the budget, the government did not change a thing in its approach, in the way it collects UI premiums and in the way it pays UI benefits. If the government had wanted to, it had an ideal opportunity to take advantage of the situation to create jobs. Here is $5 billion paid by workers that are not used for unemployment insurance. It could have taken this opportunity to lower UI premiums, which would have left in the economy $5 billion more that could have been used to create new jobs. The government should have jumped at this opportunity, if it had been sincere, having promised during the last election campaign to create ``Jobs, jobs, jobs''. It had the opportunity to create jobs, but it did nothing. It did not jump at the opportunity. Instead it jumped at the opportunity of making a good show.

Why is the government trying to improve its image these days? Why does it need so much to improve it? Government members, from the Prime Minister and the Minister of Finance on down, surely watch television. They must watch television. They must see what is going on in the other provinces. They must see what is going on in their own province, in some cities, when the government announces measures that will affect the underprivileged.

I wonder if the government is not paving the way, just in case it might no longer be able to run the country in a few months from now. The Axworthy reform, which was withdrawn at prorogation, is a bill which the government is trying to reinstate right now. This reform is not all that popular. Thousands and thousands of citizens, people from the provinces of Quebec, New Brunswick, and Ontario, are complaining about this reform, calling it inhuman because it mostly picks on the less-privileged.

Could it be that the government that is about to reinstate this bill, which will surely prove to be very unpopular, is trying to rebuild its image just in case it has to call an election? It could be. The government might have to call an election because of its unpopular measures, so it might be thinking: ``Maybe we should start preparing some ground work here.''

It is a pity that I only have a few seconds left, Mr. Speaker, because I have so much more to say, but I will rely on my hon. colleagues to take part in this debate and decry not only the government, but also the budget, which, as I said before, does nothing to correct the disastrous debt and employment situation we have in Canada.

Mr. Paul DeVillers (Parliamentary Secretary to President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, I have an opportunity today to comment on the government's budget and to highlight its main components which, I believe, will benefit all Canadians in the short and long term.

I would first like to commend the government-unlike my colleague from across the way-for respecting the voters' will,

which was clearly expressed as regards taxation. Canadians do not want any tax hike, because they believe that they are already paying their fair share of taxes.

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The government has chosen to fit this tax freeze into an overall strategy which consists in guaranteeing our financial future while continuing to put our public finances in order. In this regard, the 1996 budget is consistent with the 1994-95 budget, and this will enable us to reduce the deficit to $24.3 billion in fiscal 1996-97 fiscal year, or 3 per cent of the GDP. This development shows that the Minister of Finance will undoubtedly meet his deficit reduction targets.

Given the delicate state of the Canadian economy at the present time, the federal government could have opted for harsher measures. In fact, some provincial governments, such as the Ontario government, have chosen this path which, I think, does nothing but exacerbate the economic problems we face. The Liberal government rejects any solution based on ideologies that are narrow and prejudicial to Canadians. Our attitude toward the economic changes that have to be made is one of pragmatism and fairness to all levels of our society.

I will give as an example the Canada Health and Social Transfer, which will benefit from secure, stable and increasing funding over five years, receiving $25.1 billion the first two years and an increase based on economic growth for the next three years.

I will say that, contrary to what some sovereignists are saying, there is no new reduction of transfers to the provinces. This criticism is unfounded because it refers to the reductions announced in the 1995 budget. On that subject, I would like to indicate that those reductions from the 1995 budget represent 3 per cent of provincial revenues, not the astronomical amounts mentioned by our critics.

The most disadvantaged in our society will not be forgotten in this budget and by this government. Budget cuts will not be made on the back of students. All Canadians can count on stable funding for health insurance.

Do these measures aimed at securing the future of social programs come from a government that could not care less about the well-being of the community? Do these measures bear the mark of this economic laissez- faire, both unbridled and lacking in social conscience? No. These measures show the will of the government to guarantee the social programs that Canadians presently enjoy while allowing for fiscal consolidation.

[English]

I was quite pleased by some of the measures announced by the finance minister. He announced two specific improvements that will benefit children. One measure will see the child care deduction extended to passive income such as unemployment insurance.

I had proposed this amendment to the finance minister which was spurred by the experience of a co-operative education student and constituent, Ms. Janet Lewis, who worked in my office. She was on unemployment insurance at that time and therefore could not claim the child care deduction even though she needed child care in order to get her high school diploma. This inequity has now been addressed in the government's budget.

[Translation]

I would also like to mention that the new budget will give $250 million more a year in supplementary assistance to some 700,000 low-income Canadian families, a third of which are single-parent families.

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This is quite significant since the earned-income supplement under the child tax benefit will be doubled in the two next years, going from $500 to $750 in July of 1997, and to $1,000 in July of 1998. Let us not forget that our children hold the future of our country in their hands and that child poverty represent a threat. I think that that initiative will bring more social and economic equity in Canada.

I noticed with pleasure that the government dealt with the situation of youth on the job market by reallocating funds from other programs to the Student Summer Employment Program. That is a step in the right direction. Nonetheless, I hope that the government will take more initiatives to create more new jobs for all Canadians.

[English]

In this regard several initiatives come to mind. The government's infrastructure program is a fine example of job stimulation, obviously benefiting the workers who obtain direct jobs from the project but also the economy as a whole. The future continuation of this program would, I believe, be beneficial to Canada's economy.

A project to stimulate the construction industry would also go a long way on the job front. This project, apart from the creation of construction jobs and industry spin-offs, would also contribute to the social development of communities, allowing the government to kill two birds with one stone.

[Translation]

By bringing changes to old age pension benefits, the government is once more confirming its support of the principle of equity by better targeting benefits in order to give better support to low income Canadians and by reducing or eliminating benefits to high income seniors. Liberals have not forgotten the concept of a just society. They stand by it and have shown it in the budget.

Need I mention, as many hon. members already did, that the new seniors benefit will be tax free and fully indexed?

This budget is based on a sense of moderation. It will allow the government to reach its goal of fiscal consolidation. In fact, the government acknowledges the need to put its fiscal house in order but not at the expense of a just society.

Economy is only a means of making society work. It is not an end per se and should never be.

Mr. René Laurin (Joliette, BQ): Mr. Speaker, I did not have time to say everything I wanted before and this gives me the opportunity to ask a question of my colleague opposite who praised the measures proposed by the government.

He did not say much about the measures proposed by the government in its budget with regard to corporate taxation. For months and years now, the Bloc Quebecois has been asking the government to act to ensure that all profitable businesses pay at least a minimum tax. We are not talking about start-up businesses which are struggling and losing money, but there are thousands of businesses in Canada, some say between 60,000 and 70,000, which have been profitable for years and which are still not paying a cent in taxes because of the existing Canadian legislation.

We learn in the budget that the government is creating a technical committee to review business taxation. It will carry out studies to determine the appropriate level of taxation. Should corporations be paying more taxes or less? Should tax shelters be revisited? Should they be eliminated or should new ones be created? What should become of tax havens, for example?

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The government announced the creation of that committee in its budget and said that seven or eight experts would be members of that technical committee. There will be university professors, chartered accountants, scientists and some experts who already manage funds in tax shelters because they have offices in tax havens. These people will be members of the committee and will advise the government on the approach it should use.

The finance minister said, at lunch time today, that it is normal to consult people who know about tax shelters if you want to get some adequate recommendations. If we were to push the comparison a bit, we could say that it is like creating a Hell's Angels committee to help the government change the legislation on organised crime. We have almost gone that far.

I would like to know my colleague's opinion on these measures his government wants to implement.

Mr. Paul DeVillers (Parliamentary Secretary to President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, I thank my hon. colleague for his question.

I totally agree with him that businesses should pay their share of taxes to the government. In his question or comments, he indicates to us that he is not satisfied with the membership of the commission, but that is only a beginning. I am sure the government will try to find ways to settle its matters so that large businesses pay their share of taxes.

[English]

Ms. Jean Augustine (Etobicoke-Lakeshore, Lib.): Mr. Speaker, I am sharing my time with the Parliamentary Secretary to the Minister of Human Resources Development.

The residents of Etobicoke-Lakeshore join me today as I stand to participate in the discussion of the 1996 Liberal budget. This is a budget which clearly demonstrates the government's ability, not only to listen but, more important, its ability to act.

In my town hall meetings, in discussion with community groups, and my regular meetings with various community leaders, the message has been consistent: maintain vital social programs but reduce the deficit with spending cuts, not tax increases. This is the message that my constituents in Etobicoke-Lakeshore told me to bring to Ottawa.

Without digging into the pockets of Canadians, the budget has managed to offer something for everyone. It reinforces a secure, stable and growing system of federal support for medicare, post-secondary education and social assistance. At the same time it re-emphasizes jobs and economic growth while creating investment in three priority areas; youth, technology and trade. These areas are essential to future jobs and future growth in my constituency.

I invited 50 of my constituents to meet with me this morning to hear what they had to say about the 1996 budget. I held a forum in order that we may continue on in our important dialogue, addressing the needs and concerns of our community. We met and we will continue to meet because a budget is not an end in itself but a means to a better future for all Canadians.

I would like to take this opportunity to tell the House that my constituents were very pleased that the Liberal government, for the third consecutive year since its election, has not introduced personal income tax increases. Businessmen and businesswomen drew more encouragement from the fact that no new corporate taxes were introduced.

Many of my constituents wrote to me and expressed their concerns about gasoline taxation. I remember letters from Mr. Victor Rowland, Mr. and Mrs. William and Jean Christie, Mr. and Mrs. Andy and Theresa Manuel, about gasoline taxes. They were

told this morning that their voices were heard. The government did not increase the price of gasoline or any other excise tax. Less taxes translate to more money in the pockets of individual Canadians. Etobians and other Canadians have every reason to be encouraged by the fiscal process the government is making on the national agenda.

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The Minister of Finance reaffirmed our deficit reduction plans in the House. We have delivered on the red book commitment to reduce the deficit to 3 per cent of GDP, down from the 6 per cent that existed when the government took office slightly over two and a half years ago. Over the horizon we can already identify evidence of the inevitability of the new 2 per cent goal.

Fiscal progress should always be a means to greater public ends, to lower interest rates, to more jobs, to a more prosperous and secure Canada.

Of equal importance, our fiscal progress will better enable us to move forward on other priorities and issues so important to our citizens. Clearly one of those high priorities must be the preservation of Canada's network of social programs. These are programs which offer life long protection to Canadians. These programs have helped established us as one of the most envied nations in the world.

To achieve that end, as the Prime Minister promised, we had to provide a long term funding arrangement for health and social programs that is growing, stable, predictable and sustainable. The Canada health and social transfer was introduced in last year's budget as the single largest federal means of providing financial support to provinces for health care, for secondary education and social assistance.

One of my constituents, Ms. Barbara Center of the Lakeshore area multiservice program, which in Etobicoke we fondly call LAMP, articulated her concerns on the effects of possible reductions in federal transfer payments for health care at my Etibocoke-Lakeshore prebudget consultation in early January of this year. She will be pleased to know that not only the present parliamentary secretary to finance but also the Minister of Finance heard her remarks.

My constituents are pleased to hear that the 1996 budget now acts to extend the CHST, and furthermore that there will be no further cuts to the CHST. Following consultations with the provinces, the new budget sets out a new five-year funding arrangement for the CHST in which transfers grow and the cash component is stabilized and increased over time.

The CHST entitlements will grow from $25.1 billion to $27.4 billion over the next five years, an actual projected increase of $2.3 billion higher than in 1997-98. This will mark the first time the federal government has taken action to increase the growth in these transfers since the age of restraint instituted in the mid-1980s.

It is also important to note that the government will legislate a floor to provide a sound guarantee that cash transfers will never fall below the $11 billion mark at anytime during those five years, and this is important for us. These proposals demonstrate the Liberal government's strong commitment to secure Canada's health system and social safety net and to build a renewed social and economic union. This is a system that many Canadian seniors have helped to build.

In this light, the 1996 budget takes the necessary action to safeguard the public pension system not only for present seniors but also for our youth who will one day become seniors.

Our system faces many challenges. Canadians are living longer and hence receive pension benefits over a much longer period. There will be fewer working Canadians to support the escalating cost. These factors and others will increase the cost of our public pension faster than our capacity to pay for them unless we act.

The government in partnership with the provinces and territories has already launched a major public consultation program on changes needed to the Canada pension plan.

The Ontario Coalition of Senior Citizens was also represented and did submit its concerns at the Etobicoke-Lakeshore prebudget consultation. The coalition will appreciate knowing that while the OAS and GIS programs have been subject to taxation, the new seniors benefits will be completely tax free. They will incorporate the existing age and pension income tax credits. Seniors will not have to report the benefit on their tax forms. Furthermore, payments to couples will be made in separate and equal cheques to each spouse. As the benefit will be fully indexed to inflation, a vast majority of seniors will be better off.

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It should be emphasized that savings will come from slowing the rate of growth in program cost, not at the expense of those in need. While the savings at first will be small, they will build year by year to about 11 per cent of program cost by the year 2030.

Public consultations will be held on legislation which will be introduced in the future. We are ready to participate. The constituents of Etobicoke-Lakeshore can be assured that I will once again offer their input toward the construction of a more sustainable public pension system. Their participation is critical to us as we move forward with these changes.

I end by underscoring my belief that the government is on the right track. In 1993 we ran on a balanced platform. We made a commitment to restore fiscal sanity to the country while focusing our efforts on protecting vital programs and improving opportunities. The budget shows we are firm in our resolve. The federal deficit will continue to decrease and the economy will continue to

grow. Most important, I am especially pleased that we are not cutting spending on the backs of those who can least afford it.

I am confident that as I continue to discuss the budget with the residents of Etobicoke-Lakeshore they will support the measures the budget proposes to secure Canada's social and financial future. I therefore call on all of my colleagues in the House to join with the government in support of the budget.

Mrs. Daphne Jennings (Mission-Coquitlam, Ref.): Mr. Speaker, I remind the hon. member that the budget offered no tax relief. It was not a balanced budget, which we had hoped for, at least for 1997-98, which we certainly could have achieved.

The debt is climbing at a tremendous rate. The debt was not mentioned. We keep talking about the deficit. The deficit may be decreasing but the deficit could also disappear if it were handled correctly. What about the debt? The debt is growing. What are we doing about the debt? That is the serious issue.

In particular, the hon. member mentioned there were no tax increases. The new child support package, which will come into effect on April 30, 1997, raises some concerns which relate to what I call tax increases.

One of the concerns is no deduction, no inclusion. That is the new role of the day. The parent paying support will no longer have an incentive and so they might default. It might be easier for them to default now. It probably will happen. Wonderful people that they may be, these are difficult times.

If this is the case, we may see that it will be more difficult for them to find the money. If the incentive is not there for deductions, we may see this occurring. We may have a new social problem erupting before our eyes, or rather an increased one because some of that occurs right now. It may be an enlarged social problem which will come about. That will make it very hard on the parent trying to support a child and counting on that support.

If the person paying support no longer receives a deduction, that is a tax increase. Therefore I disagree that there are no tax increases.

Will this cause a present problem to become larger, requiring more taxpayer dollars to be spent as a watchdog or as a guideline to keep these people paying? That will be costly to the taxpayer. Who pays when the courts get involved? The taxpayer. That is a tax increase.

The second concern with respect to the new rules announced is that the Minister of Finance can make it retroactive. I fear this will open the flood gates for more litigation. Either the payer or the recipient could sign and file for change. That will lead to enough litigation among family law lawyers across the country to ensure that very few of them will be sitting idle. Who will pay the cost of the court cases or even of the new actions which may succeed with mediation only? That is another tax increase.

Nothing in today's world is as costly and expensive as court cases. Courts are expensive and divorced parents have enough hardships to overcome. Do the children want to be reinvolved in more hassles this litigation will open up? They do not need to put in more time, more energy, wasted energy, that this new legislation will make possible.

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I realize we have a problem right now with the legal profession. The Globe and Mail the other day stated some lawyers are not able to pay their fees to the law society. I can see this being a major problem.

However I am concerned that this almost seems like an attempt by the government to open up a flood gate, and so now we have all these new cases and for what purpose? I wonder if the member could comment on this. How does she feel this legislation will help people?

Ms. Augustine: Mr. Speaker, the premise of the member's question underlies the point that divorce and the courts are really a way to accept responsibility for children.

I ask the member to look very carefully that within marriage itself and within the responsibility parents have for their children, that responsibility has to be first and foremost, not looking at the legal system and the taxation system as the way and the means to bring about resolution to the responsibility parents have to support their children.

It is also interesting that Reform members look at the budget, a budget that contains so much, a budget that speaks to so many issues, and focus on the negative aspects. Instead they should pull from it some of the things we need as Canadians, as a community and as legislators to work together and to move issues ahead.

The budget provides the parameters. The legislation that will follow and the support through the taxation system will help confront the social problems that face us. We must focus on the problem of poverty among youth and among children, rather than seek to redress to every ill through the taxation system.

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, I am proud to rise in support of the budget tabled by my colleague, the Minister of Finance.

In the 1996 budget we have tried to reflect the commitments we made during the 1993 election. To the House and to all those listening in Kenora-Rainy River and across the country, it

continues to put our fiscal house in order and promotes our job and growth agenda.

We all know and have to continue to emphasize that when we came to office we inherited a deficit of $42 billion, 6 per cent of GDP. We stayed firm in our commitment to reach an interim goal of 3 per cent of GDP within three years.

To meet this goal we embarked on the most thorough review of government programs and spending ever seen in Canada. As the Minister of Finance pointed out yesterday, it would have been quite easy to balance the books in one year. We could have taken the Reform Party's approach and simply hacked away at the most vulnerable in society.

Fortunately, though, we are not the Reform Party. It tries to hide its lack of ideas by irresponsibility and spouting out simple solutions to complex problems. We take our responsibility to all Canadians very seriously. We do not try to offer easy answers because there are not any.

We have met our commitments to Canadians. Through our balanced approach we have brought government spending to its lowest level of GDP since 1949. At the same time we have maintained vital programs like health care which some members across the floor would be happy to abandon.

We have not only met our deficit targets, we have exceeded them. This budget sets out a 2 per cent deficit target for 1997-98. We are on the way to a balanced budget. We will not stop, I assure the House, and the finance minister has reiterated this, until we get there.

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Cutting is not an end in itself. It is a means to an end. We on this side of the floor recognize that. Our management of the economy has seen interest rates fall dramatically, a vital component of job creation which some people seem to forget. As a result, more than half a million full time jobs have been created during our mandate.

Some of us who are little bit younger may not be as wealthy as some of the folks across the way, but just think about this for a moment. If the average homeowner with a $100,000 mortgage were to factor in the changes in the interest rate for the last two years that have been possible by the changes that this government has made, the savings would be $2,400 a year. That is a significant amount of money for someone who has a mortgage. That is as good as any tax cut, the ability to say to the millions of people who have mortgages that they have saved a tremendous amount in interest payments because of the good fiscal management and policies of this government.

We recognize that we can and should do more. The budget sets the wheels in motion after the first two budgets cleaned up the Tory mess. We are going full steam ahead to provide opportunities to Canadians.

I do not have the time to go into the full details, but I want to touch on some of the key points in the budget that was presented to Canadians yesterday. The first point is youth. Young people today face great challenges both in financing their education and in finding their first job. The budget marks a major commitment to youth. Tax benefits for full time students are being increased. By doubling federal funding for summer jobs, an extra 30,000 young Canadians are being provided the opportunity to finance their education.

The government is building on the successful youth internship program and committing an extra $315 million to work with the private sector to create youth employment. Some people across the way might think that is small potatoes and something to sneeze at, but for young Canadians who know how difficult it is to get their first jobs that kind of help is welcomed news. By investing in our youth I can assure hon. members that the government and most Canadians believe we are building a stronger future.

We are also helping Canadian families, especially the working poor. Parents who want to upgrade their education and find better jobs will now be able to claim child care expense deductions. This includes parents who show the courage to return to high school. By changing the child support system, we are doubling the working income supplement of the child tax benefit. This will benefit more than 700,000 working Canadian families. This support for the working poor is one of the values that makes me proud to be a member of the government.

It is very easy to say cut and slash until the budget is balanced. However, we all know and I am sure you know, Mr. Speaker, that in your riding there are many poor people who could not survive the kind of quick action that some parties in the House advocate.

We are also showing a dedication to seniors now and in the future by introducing the new seniors benefit. By targeting resources to those most in need, benefits for seniors with incomes below $40,000 will be maintained and increased. Our seniors built this country and the government will fight to protect their independence, their benefits and their dignity from those across the floor who want to leave them twisting in the wind.

I come from a relatively lower than middle class riding in northern Ontario. These kinds of changes are going to improve the positions of the vast majority of seniors who I represent. I would have thought that people across the House would have been quick to get up on their feet and say that this is a welcome change and something of which all parliamentarians should be proud, that we have made seniors more secure in their golden years.

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I am also proud that we have set out a plan which will not only stabilize but will increase transfers to the provinces for health care and post-secondary education. After all, our party created medicare and will not see it destroyed. That commitment is what differs members on this side of the House from other members.

I would also like to touch on aspects of the budget that will directly affect rural Canada. As a rural member of Parliament I have spoken many times in the House and in caucus about rural Canada and its unique problems, as opposed to the problems some cities have.

The community access program helps rural and isolated communities develop and expand Internet access. In northwestern Ontario it is a real opportunity for us to overcome our isolation and compete with the world. This program has already benefited several communities in my riding, including Ear Falls, Ignace, Sioux Lookout and Dryden. The budget provides an extra $30 million to the vital program and I applaud the Minister of Finance for this.

Sometimes the very basics of infrastructure that people from major centres take for granted do not exist in the rural parts of the country. For us in rural Canada to compete not only with our friends in some of the major centres in Canada but around the world we must have the tools.

Private sector companies like Bell Canada will not put that kind of investment into rural Canada because there is no return on the investment. Therefore the government has a very legitimate role to play. I applaud the Minister of Finance and the government for recognizing that without government help these links would never take place.

Another vital sector that members have heard me speak about on several occasions is mining. The rural caucus my colleagues and I belong to has spent many afternoons and evenings in meetings with various ministers trying to convince them of the need to help the mining sector.

The new tax provisions concerning flow-through shares and capital cost allowances will spur exploration and investment. Rural Canada has been asking for these measures and the government has responded to the need.

Finally, the budget allows a 2 per cent increase for Indian Affairs and Northern Development. I know the members of the Reform Party are going to criticize that increase. Before they do, they should learn a little history. They should visit some First Nation communities and have their blinders removed.

There are 46 First Nations in my riding, more I believe than any other riding in Canada and I am proud to represent these First Nations in the House. I have seen firsthand the poverty and despair brought on by decades of neglect and mistreatment by governments of all stripes. I have also seen the determination that First Nations have to take control of their destiny and break the cycle of despair.

We cannot rewrite history, but we can and must help toward a better future. Through our commitment to aboriginal Canadians we are writing a better future. I quite frankly applaud the government for recognizing the poorest of the poor in our country.

In conclusion, we have listened to the Canadian people. We have reduced spending. We have held the line on taxes. We have protected and enhanced the programs and benefits that provide opportunity for Canadians.

The Minister of Finance has lived up to his commitment and I want to congratulate him. Once again, I reconfirm that I support the budget and the government. We are on the right track and we are going in the right direction.

Mr. Rey D. Pagtakhan (Parliamentary Secretary to Prime Minister, Lib.): Mr. Speaker, I want to compliment the distinguished presentation from my colleague from Rainy River. I thought I should seize the opportunity just in case the opposition did not see the wisdom of this budget and the wisdom of the member's presentation.

We have to remind the opposition what the finance minister meant in his budget speech when he said: ``We must never let the need to be frugal become an excuse to stop being fair''. That sums up the essence of the 1996 budget. We have stayed the course of fiscal health while at the same time focusing attention on the needs of all Canadians. The government has demonstrated a caring sensitivity all along.

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I liked the creativity of the hon. member's presentation when he used a concrete example. He talked about the savings that each one of us have on mortgage payments. I still have a mortgage to pay. Maybe members opposite have fully paid for their homes but I, like most Canadians, have not. Savings like these are real savings to Canadians and we must not lose sight of that fact. That is a mark of the government's caring and compassionate commitment to Canadians.

Speaking of another mark of the government, it was stated in the budget that there will be a health services research fund. That is a mark of the creativity of the government. It ensures that our health care system is the best in the world, not only in the quality of care, but in the efficiency and the effectiveness with which we deliver the system.

The hon. member for Rainy River told us about the attention, the focus and the commitment to the youth, the students and the seniors of the government. All are hallmarks of its caring soul. I

compliment the member on his excellent speech, seeing that the opposition hesitates to do so.

Mr. Nault: Mr. Speaker, I want to thank my colleague for his kind remarks.

One of the things that has intrigued me the most about some of the comments members of the third party have made is that they keep saying the government did not cut taxes. Why did it not? They say it would stimulate the economy.

I want to quote a politician that the opposition knows very well, Premier Klein of Alberta. He has given advice to another friend of ours, the premier of Ontario, on the issue of making major tax cuts as part of his overall game plan.

I want to put it on the record because I think this must be the only group in Canada that thinks you can make these tremendous changes and reduce the deficit and get it under control while at the same time cut revenues by 30 per cent, as Mr. Harris has suggested.

Let me read the advice that Mr. Klein gave to Mr. Harris the other day, as quoted in the Toronto Star. ``Harris is wrong to be planning to cut taxes at the same time as he is cutting government spending. I think he is going to have real difficulty doing both. Here in Alberta we never even contemplated a tax cut. Our focus was entirely on eliminating the deficit''.

I concur with that. I believe that anybody who thinks that Mike Harris is going to give Ontarians a 30 per cent deal with his fiscal problems is smoking something that is illegal in Canada.

I cannot believe that the members opposite keep suggesting to us that we have not done a good job with our budget because we did not give a tax cut. I just thought maybe the members would keep in mind that their friend in Alberta disagrees with them.

Mr. Ed Harper (Simcoe Centre, Ref.): Mr. Speaker, I am pleased to take part in this debate.

Before I begin my comments I want to say this. I am sure that Premier Harris of Ontario will be delighted at the words of wisdom that have been passed his way by a member of the government which is running up the largest deficit in this country's history.

The Liberals are running up a debt of over $600 billion. They talk about their concern for our children's future. They have just mortgaged it to the point where our children will not have the opportunities in their future years that we have had. I am sure Mr. Harris will take that remark on the basis of where it came from. I speak tonight on this budget with our country at a crossroads, a country in a fiscal and unity crisis. It is a time in our history when Canadians are looking for leadership, vision, hope.

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That was reflected in the year end poll that was reported in Maclean's magazine where Canadians' view of their future is at an all time low. That is after two years of the Liberal government. Canadians view their future with more pessimism than they have in 20 years.

After two years of the Liberal government we had a throne speech and a budget and hopefully a new beginning, a realization of the errors of the past and a move toward a new and brighter future. They both failed miserably in addressing that, unfortunately.

The Prime Minister started out in the throne speech by declaring to the world that the back of the deficit has been broken. I do not know of any business organization that agrees with that comment. The only back that has been broken up to this point is the back of the taxpayer. We have not broken the back of the deficit.

I will read from a letter that came from the president of the Canadian Chamber of Commerce. The Canadian Chamber of Commerce is a group of entrepreneurs, an organization that creates jobs in this country, an organization that wants to get this economy moving. On December 6, 1994 a letter to all members of Parliament and the Senate stated:

Last year through the aim for a million jobs survey our members told us in no uncertain terms that elimination of the deficit and reduction of the debt must be our number one priority if Canada's entrepreneurs are to create new jobs. The next federal budget will be crucial to the future of our country.

Tough choices will be necessary and despite the overwhelming consensus that the deficit must be cut, we fear that the cuts will not be deep enough. The finance minister's promise to meet his target of a deficit that is 3 per cent of GDP by 1996-97 is simply not good enough. The deficit must be reduced to zero by 1997-98. The consequences of the government not following through on this are unthinkable.

There is nothing in this budget that will create jobs, jobs, jobs. There certainly is no hope for tax relief. There is no vision. There is no future that Canadian taxpayers can see in it.

This is not the first budget. This is the third budget this government has brought forward. The first budget did absolutely nothing. It was a stand pat, feel good, we do not really have a problem budget. That is after nine years in opposition. The Liberals were nine years in opposition. They finally come into power and they are not ready for it. They do not know how to deal with it. They do not even understand the magnitude of the problems the country was facing.

Along comes the second budget in 1994 and finally we get some realization that we do have a problem. They finally come to realize that there is a relationship between these deficits and this huge debt and job creation. In that budget we started to make some modest

cuts, not nearly deep enough but at least we saw some hope that there is now a move in the right direction, that the government has made the connection that it we want to create jobs, if we want to offer tax relief to Canadians, we have to do something about our overspending and get our budget in balance.

This third budget has just dashed all those hopes that Canadians had. What we have in this third budget is time out, no more cutting. We will stand back now and just let things roll along. We are in a battle to save Canada, the most crucial budget in Canada's history, and what does the government do? It calls time out.

The government can call time out. It will quit the battle at this point but the clock keeps ticking. At $1,000 a second, $100 million a day we are deeper and deeper in debt while the government stands back and tries to decide what it will do. It just is not good enough.

This budget fails to deal with two main election promises. Those are jobs, jobs, jobs and the GST.

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The infrastructure program was to be the answer to job creation. For month after month we heard what the infrastructure program has done to create jobs. It has been an absolute failure. Worse than that, it has put us $6 billion deeper in debt. If it were half as good as the Liberals claimed it to be, I would have thought they would have reintroduced it. It has been deep sixed, as it never should have been introduced.

In the budget speech the finance minister delivered there was not a word about the GST. There is not a word about it because the Liberals are embarrassed about their inaction with respect to the GST. A lot of Canadians voted for the government on the understanding that it was to scrap the GST, not sugar coat it and not have it reborn under another name.

At least one member of the government has had the courage to stand up in public and say: ``We were not true to our word. We did not do what we said we would''. I applaud the hon. member for York South-Weston for saying that. A few other members have indicated their embarrassment. I hope they have the courage to stand up and say the same thing.

What we will not find in the budget speech but which is in one of the documents is a reference to the federal sales tax being harmonized. There was never any talk of harmonizing it, but that is what is coming down. That means we will have what is known as the LST, the Liberal super tax. We should mark our calendars. It is not far down the road. Canadians will not be fooled by the LST; a tax is a tax is a tax.

Let us take a look at exactly what was in the speech presented by the finance minister yesterday. On page 3 he very clearly outlined the problem. In his opening remarks he told us that he understood the problem under ``Securing the Future''. It is as clear today as it has ever been that Canadians do not want rhetoric from their governments. What they want is action. What they seek is real progress.

Seldom in our history have so many experienced such anxiety. Canadians feel their very way of life is at risk. They look at medicare and feel it is threatened. They look at the pension system and wonder if it will be there in future years. They consider the economy and worry that the gale force winds of competition and change will carry their jobs away. Canadians think about their children and ask what kind of opportunities will be left for them.

If there is one obligation before government today it is to do its part to address these deep concerns. It has to do what it must so that confidence can overcome anxiety and hope can replace the despair in the country today. The budget does not deal with those deep concerns.

Let us move on to page 4 under ``Securing Our Financial Future''. Here we get into the 3 per cent of GDP they keep heralding in speech after speech. I do not know who set that yardstick. It is no yardstick. The IMF and Moody's have both said it is no yardstick, that it is too low, it is not a realistic objective. What the government is saying by aiming so low is that it does not really understand the magnitude of the problem and it is not prepared to deal with it in a realistic way.

Page 6, paragraph 4, talks about getting budgets in balance:

No matter their political stripe, every single province and territory has as a primary goal the return to fiscal health. In fact, eight are expected to report a balanced budget-or even a surplus-for the fiscal year ending this month and the results are striking.

What he is saying in this document he is not prepared to do. Obviously he does not really believe it. However, it is right there. This is the blueprint.

On Page 7, ``Principles for Securing the Future'', paragraphs 4 and 5 state:

Second, our fiscal strategy will be worth nothing if at the end of the day we have not provided hope for jobs and for growth. We must focus on getting growth up at the same time as we strive to get spending down.

Third, we must be frugal in everything we do. Waste in government is simply not tolerable.

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We are about to spend $675,000 advertising the $2 coin, as if Canadians had any choice. If that is not a colossal waste of government spending I do not know what is.

On page 8 under the heading ``A Measured, Responsible Pace'':

Chronic deficits put the disadvantaged at risk, because it is they who suffer when the financial strength of government is so weak it can no longer reach out to those in need.

However, that does not mean that we share the view of those who think we should be going to zero deficit overnight.

I will jump to the real tragedy in this document. It is on page 28 under the summary statement of transactions. The first line is the budget revenues. We show budget revenues going from $116 billion to $141 billion, an increase of $25 billion. We then drop down to the deficit. The deficit declines from $42 billion to $17 billion, a drop of $25 billion. The government is reducing the deficit on revenues, not on cost cutting, which this document is attempting to tell the Canadian people it is.

However, the real shame here is this net public debt. The government in its mandate is going from $508 billion to $619 billion of federal debt. I say shame. That is mortgaging our children's future and as a government it should be ashamed of itself.

Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, I have the pleasure on behalf of the Reform Party of rising to speak to the budget. In doing so I will try to keep my remarks brief and to the point.

In the 1993 election the Reform Party ran on a proposal to cut the deficit in order to create jobs and to cut nearly $20 billion in government spending over a period of three years. The Liberal Party ran on a program to create jobs by ignoring the deficit.

Let us look at what we actually have from the government after three years. I draw the attention of any Canadian who is interested to the budget speech. Skip through the first 27 or 28 pages, which is all bafflegab. One thing we notice about this minister is that the less he has to say, the longer his budget speeches.

There were fewer proposals in this one than in the last two but it must have been the longest budget speech in history. When you get to the end, look at the four pages at the back because they provide a statistical summary of the budget that has most if not all of the relevant information for most Canadian taxpayers.

From 1993 to 1998 the deficit is projected to fall from $42 billion to $17 billion, a drop of $25 billion. How is that achieved? Revenue will rise in the same period by $25 billion. This is the government saying it has no tax increases but revenue is rising as a percentage of the economy.

However, if we have a $25 billion revenue increase and a fall in the deficit of $25 billion, why do we have any spending cuts at all from the government? Why do we not have a balanced budget?

We have an increase in interest payments of at least $11 billion. I say at least because most of that has already been achieved and it will continue to rise. One of the ways the government makes the deficit look like it is to continue to fall is by insisting that interest payments will taper off, that we will have lower and lower interest rates, but that is the best case scenario.

Interest payments have already risen $11 billion, and so the government has been cutting over this period. By the end of 1998 it will be cutting $23 billion in programs and will still have a deficit of $17 billion. That is an interesting figure, $23 billion, because that is more than the Reform Party had proposed to cut in the 1993 election. It is because the $100 billion in debt the government is adding, it is the cost of its delay and the cost of fiscal mismanagement. By the way, the debt at this moment and in the next year at least and probably the year after will continue to grow faster than the economy.

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Now the Liberals tell us they have targets. The targets are outlined in the budget. We just had a deficit of $32 billion. It will be $24.3 billion next year and the year after it will be $17.7 billion. This all sounded very familiar, so I asked one of my researchers to get me the 1991 Tory budget presented three years into the Conservatives' last term of office. Guess what the 1991 Tory budget stated. The deficit that year was $30.5 billion; for the fiscal year beginning in 1992, the projection was $24 billion; in 1993 it was $16.6 billion. It all sounds familiar.

Mr. Campbell: And did they get there?

Mr. Harper (Calgary West): The parliamentary secretary asks if they got there. No, they did not get there. And there is no guarantee we will get there this time either.

The last government did not get there because it did not have a plan and because everything it did was eaten up by increased interest payments. But I will say that this government does have a partial plan to get there. What is that plan? Very simply it is to attack the slash and burn Reform Party while slashing in particular social programs far deeper than the Reform Party ever proposed.

In the 1993 election we said to cut unemployment insurance by $4.5 billion. There were howls of outrage from the Liberal Party. The Liberals have already cut the program which was at $20 billion at its peak under the Tories and which is now paying out $13.5 billion today with more cuts to come as proposed in the bill the government tabled in the last session and will table again.

We said to make old age security based on income and not to pay it to anyone with an income above $53,000. The Liberals now propose exactly the same policy. No more universality. Make old age security based on income. Except now it is based on $40,000 instead of $53,000.

We said to cut the Canada assistance plan by roughly 10 per cent, $750 million. The Liberals have done exactly that and there are more cuts to come in the next two or three years.

In our 1993 election proposals we said we did not need to cut post-secondary education at all to balance the budget. The Liberals have already cut it 10 per cent and there is more to come.

We said not to cut health care funding. It is the most important priority of all Canadians. The Liberals said they would not. They said they would preserve the five principles of the Canada Health Act. They have cut health care by 10 per cent and there is more to come. There are still the five grand principles; there will just be no money to implement them.

In fact, in these last three areas, the Canada assistance plan, health care and post-secondary education, in the next two to three years the Liberal Party will cut over $7 billion in cash payments to the provinces. This will be the principal means by which the Liberals will reduce the deficit.

What is still there that we have proposed to cut that the Liberal Party has not cut? The Liberals have not cut the regional pork, the regional development programs. They did not cut the funding to the special interest groups. All those programs are still there. And of course, they still have their gold plated MP pensions.

What happened to the other promise, the one about jobs? We were told we did not have to worry about the deficit because we were creating jobs instead. Well, there is no jobs plan in the budget. There is not even an estimate on jobs in the budget. It is unprecedented in my 10 years of experience in federal politics to not even provide employment estimates.

The Liberals say cutting is not an end in itself. Cutting is apparently not an end in itself. Cutting is done by the government not as an end in itself but in order to protect friends, in order to send out political messages, in order to attack the Reform Party, in order to mask fiscal incompetence. In other words, the government cuts spending in order to make programs, in order to make taxpayers and in order to make jobs the targets of our policies instead of the winners; to make them the victims instead of the winners.

The Liberals were elected in 1993 by telling people what they wanted to hear: there would be no GST, no free trade, no distinct society, lots of jobs, universality of pensions and do not worry about the deficit.

Canadians have to make a very serious decision next time of whether they will be fooled again.

Mr. Derek Wells (South Shore, Lib.): Mr. Speaker, the member has been very critical of some of the things he says are in the budget. He has not recognized the programs for youth.

The theme of my speech when I give it next week is to compliment the government on two main things: the government has maintained its deficit targets and there are no new taxes. In my opinion it is reassuring to see that it is possible for a government to make a budgetary plan, as was outlined in the Liberal red book, and then stick to that plan budget after budget.

I did acknowledge the member opposite saying the government did have a plan. That plan projected certain deficit targets. Not only will we meet those targets, we will exceed those targets.

The main objective of the Liberal platform, the point I want to make, was job creation. There is a recognition of that. That is what we are doing by creating the proper economic climate.

The member would acknowledge that there is a direct link between deficit reduction, interest rate reduction and job creation. That is the aim of the government. That is what it will continue to do as it not only meets its targets but exceeds its targets on its way to a zero deficit over the next number of years.

Mr. Harper (Calgary West): Mr. Speaker, on the youth employment initiatives, I guess all I will say about them is the youth of Canada will be paying the interest on the borrowed money for those for the rest of their lives.

A comment was made of importance of lower interest rates for young people. Let me say something about the lower interest rates of the government.

When I was elected I was married just after that in 1993. Being an economist by training and watching what was planned in the fiscal policies of the government, my wife and I took out a mortgage. I said lock that mortgage in today for five years because under the government we will not get interest rates this good for the next five years. Today even with the low interest rates the government is talking about one cannot lock into a mortgage at the interest rate I locked into in late 1993.

The Acting Speaker (Mr. Kilger): It being 7.09 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24.

(The House adjourned at 7.09 p.m.)